publication . Preprint . 2001

The Market for Television Advertising: Model and Evidence

Robert Kieschnick; B. McCullough; Steven Wildman;
Open Access
  • Published: 01 Nov 2001
Abstract
We provide a model of television advertising based on an explicit characterization of an advertisement's contribution to an advertiser's profits that suggests that each program faces a downward sloping demand for its ad time. Hence Fournier and Martin's (1983) "law of one price" does not hold in our model. We study these contrasting arguments about television advertising by examining the pricing of broadcast network advertising. In conducting this empirical examination we encounter and solve a severe multicollinearity problem. We conclude that the evidence supports the advertising model presented in this paper and demonstrates segmentation between cable and broa...
Subjects
acm: ComputingMilieux_MISCELLANEOUS
free text keywords: broadcast, cable, market segmentation, multicollinearity,
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