Optimal Control of Broadcasting Spectrum with a Variety-Reception Tradeoff and Consumers’ Income Sensitivity

Amnon Levy and Benoit Freyens
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Benoit Freyens: University of Canberra

Economics Working Papers from School of Economics, University of Wollongong, NSW, Australia

Abstract: A socially desirable number of royalties-paying users of a state-owned broadcasting spectrum is derived within an optimal control framework where the adjustment of the number of users to above-normal profits is adversely affected by sunk costs. The optimal control takes into account the tradeoff between the benefits from higher variety and royalties’ revenues and the costs of the intensified interferences associated with entry. It also considers the positive information-dissemination effect and the negative effort-diversion effect of broadcasts on aggregate income. The broadcasting industry’s optimal steady state is identified and its stability is analyzed.

Keywords: Economics; Optimal Control; Spectrum; OTA Broadcasts; Variety; Interferences; Royalties (search for similar items in EconPapers)
JEL-codes: C61 C62 D61 K23 L52 (search for similar items in EconPapers)
Pages: 19 pages
Date: 2011
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http://www.uow.edu.au/content/groups/public/@web/@ ... ts/doc/uow101889.pdf (application/pdf)

Related works:
Working Paper: Optimal Control of Broadcasting Spectrum with Variety-Reception Trade-off and Consumers’ Income Sensitivity (2012)
Working Paper: Optimal Control of Broadcasting Spectrum with a Variety-Reception Tradeoff and Consumers’ Income Sensitivity (2011)
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