{"title":"Effects of TV airtime regulation on advertising quality and welfare","authors":"David Henriques","doi":"10.1016/j.infoecopol.2020.100897","DOIUrl":null,"url":null,"abstract":"<div><p>This paper investigates how regulations that limit advertising airtime may affect advertising quality and social welfare. I show, first, conditions under which an advertising cap may reduce or improve the average quality of advertising broadcast on a free-to-air TV platform. Second, an advertising cap may reduce TV platform’s and firms’ profits, while the net effect on viewers’ welfare is ambiguous because the ad quality may decrease as a result of a regulatory cap offsetting the direct gain from watching fewer ads. The results suggest that a regulator that is trying to increase social welfare via regulation of the volume of advertising on TV should take the effect of advertising quality into consideration. Implementing an advertising cap without regard to ad quality may result in lower social welfare than leaving advertising airtime unregulated.</p></div>","PeriodicalId":47029,"journal":{"name":"Information Economics and Policy","volume":"55 ","pages":"Article 100897"},"PeriodicalIF":4.5000,"publicationDate":"2021-06-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.1016/j.infoecopol.2020.100897","citationCount":"3","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"Information Economics and Policy","FirstCategoryId":"96","ListUrlMain":"https://www.sciencedirect.com/science/article/pii/S0167624520301414","RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q1","JCRName":"ECONOMICS","Score":null,"Total":0}
引用次数: 3
Abstract
This paper investigates how regulations that limit advertising airtime may affect advertising quality and social welfare. I show, first, conditions under which an advertising cap may reduce or improve the average quality of advertising broadcast on a free-to-air TV platform. Second, an advertising cap may reduce TV platform’s and firms’ profits, while the net effect on viewers’ welfare is ambiguous because the ad quality may decrease as a result of a regulatory cap offsetting the direct gain from watching fewer ads. The results suggest that a regulator that is trying to increase social welfare via regulation of the volume of advertising on TV should take the effect of advertising quality into consideration. Implementing an advertising cap without regard to ad quality may result in lower social welfare than leaving advertising airtime unregulated.
期刊介绍：
IEP is an international journal that aims to publish peer-reviewed policy-oriented research about the production, distribution and use of information, including these subjects: the economics of the telecommunications, mass media, and other information industries, the economics of innovation and intellectual property, the role of information in economic development, and the role of information and information technology in the functioning of markets. The purpose of the journal is to provide an interdisciplinary and international forum for theoretical and empirical research that addresses the needs of other researchers, government, and professionals who are involved in the policy-making process. IEP publishes research papers, short contributions, and surveys.
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