The timing of commercial breaks and music variety in the radio industry

This thesis contains three empirical essays using a new panel dataset of airplay on contemporary music radio stations. The first and third essays examine the timing of commercial breaks. Stations tend to play their commercials at the same time but it is unclear whether this is due to stations wanting to coordinate on timing, to reduce the avoidance of commercials, rather than common factors which simply make some times better for commercials. The first essay models timing decisions as an imperfect information coordination game. The game has multiple equilibria, in which stations coordinate but on different times, if the incentive to coordinate is strong enough. The essay shows how the existence of multiple equilibria, both in the game and in the data, can help to identify the parameters of the game and how to test for multiple equilibria. There is evidence of multiple equilibria, allowing the incentive to coordinate to be identified, during drivetime hours. The implied degree of coordination in Nash equilibrium is relatively modest but, because of externalities in the coordination game, the estimates also imply that coordination would be almost perfect if stations maximized their joint payoffs. The third essay uses a set of simple models to show that, if stations want to choose either the same or different times for commercials, the degree to which commercials overlap should depend on market characteristics such as the number of stations and the degree of common station ownership. The majority of the evidence supports models in which, on average, stations want to choose the same time for commercials as other stations in their market.

Department dc:contributor.department

Massachusetts Institute of Technology. Dept. of Economics.

Grantor dc:publisher

Massachusetts Institute of Technology

Year dc:date.issued

2004

Author dc:creator

• Sweeting, Andrew

Advisor dc:contributor.advisor

• Glenn D. Ellison and Paul L. Joskow.

• Economics.

Statement dc:rights

• M.I.T. theses are protected by copyright. They may be viewed from this source for any purpose, but reproduction or distribution in any format is prohibited without written permission. See provided URL for inquiries about permission.

Licence dc:rights.uri

• http://dspace.mit.edu/handle/1721.1/7582

Language dc:language.iso

eng

Handle dc:identifier.uri

http://hdl.handle.net/1721.1/29425

OAI identifier oai:identifier

oai:dspace.mit.edu:1721.1/29425