nep-cul New Economics Papers
on Cultural Economics
Issue of 2008‒10‒07
one paper chosen by
Roberto Zanola
University of the Piemonte Orientale

  1. Viewer Sampling and Quality Signaling in a Television Market By Levent Çelik

  1. By: Levent Çelik
    Abstract: This paper analyzes a single television station’s choice of airing tune-ins (preview advertisements). I consider two consecutive programs located along a unit line. Potential viewers know the earlier program but are uncertain about the later one. They may learn it through a tune-in if they watch the earlier program and the television station chooses to air a tune-in, or by directly sampling it for a few minutes. If the sampling cost is sufficiently low, the unique perfect Bayesian equilibrium (PBE) exhibits no tune-ins. Otherwise, the unique PBE involves a tune-in unless the two programs are too dissimilar. When the programs are also quality-differentiated, the willingness to air a tune-in, and thus to disclose location information, may be sufficient to signal high quality without any dissipative advertising.
    Keywords: Information Disclosure, Tune-ins, Uncertainty, Sampling, Signaling.
    JEL: D83 L82 M37
    Date: 2008–09

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