NABET, NABET 2016 Conference

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SELLING TELEVISION COMMERCIAL TIMES UNDER COMPETITION: AN EQUILIBRIUM ANALYSIS
Qin Geng

Last modified: 2017-03-25

Abstract


This paper studies two TV networks competing in eyeball guarantee in the upfront market. Adopting the game theoretic framework, we characterize the unique equilibrium and show that setting eyeball quantity is a dominant strategy. Through comparative statistics, we find that the network has an incentive to exaggerate its rating performance, and consequently to over-promising eyeballs. We also find that competition modeled at an aggregate level tends to over provide eyeballs than at the disaggregate level.


Keywords


media revenue management, inventory management, random yield, cournot competition