Viewer Sampling and Quality Signaling in a Television Market

Levent Celik

CERGE-EI Working Papers from The Center for Economic Research and Graduate Education - Economics Institute, Prague

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. (search for similar items in EconPapers)
JEL-codes: D83 L82 M37 (search for similar items in EconPapers)
Date: 2008-09
New Economics Papers: this item is included in nep-cul
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