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A Comment on “Is Having More Channels Really Better? A Model of Competition Among Commercial Television Broadcasters”

Author

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  • Shan-Yu Chou

    (Department of Business Administration, National Taiwan University, 1 Section 4, Roosevelt Road, Taipei 106, Taiwan, Republic of China)

  • Chi-Cheng Wu

    (Department of Business Management, National Sun Yat-Sen University, 70 Lianhai Road, Kaohsiung 804, Taiwan, Republic of China)

Abstract

This paper shows that the analysis of Liu et al. (2004) contains a substantive error—the asserted pure-strategy Nash equilibrium leading to their Theorems 1 and 2 is really not an equilibrium. We show that in their model, either pure-strategy Nash equilibria do not exist or, unlike their asserted main result, when a pure-strategy equilibrium exists, increasing the number of commercial television broadcasters does not result in lower-quality programs. Possible modifications of Liu et al.'s model that may help restore the desired result are discussed.

Suggested Citation

  • Shan-Yu Chou & Chi-Cheng Wu, 2006. "A Comment on “Is Having More Channels Really Better? A Model of Competition Among Commercial Television Broadcasters”," Marketing Science, INFORMS, vol. 25(5), pages 538-542, September.
    • Handle: RePEc:inm:ormksc:v:25:y:2006:i:5:p:538-542
    DOI: 10.1287/mksc.1050.0183
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    References listed on IDEAS

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    1. Jan-Benedict E. M. Steenkamp & Vincent R. Nijs & Dominique M. Hanssens & Marnik G. Dekimpe, 2005. "Competitive Reactions to Advertising and Promotion Attacks," Marketing Science, INFORMS, vol. 24(1), pages 35-54, September.
    2. Yong Liu & Daniel S. Putler & Charles B. Weinberg, 2004. "Is Having More Channels Really Better? A Model of Competition Among Commercial Television Broadcasters," Marketing Science, INFORMS, vol. 23(1), pages 120-133, July.
    3. Esther Gal-Or & Mordechai Gal-Or, 2005. "Customized Advertising via a Common Media Distributor," Marketing Science, INFORMS, vol. 24(2), pages 241-253, July.
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    Cited by:

    1. Yong Liu & Daniel S. Putler & Charles B. Weinberg, 2006. "A Reply to “A Comment on ‘Is Having More Channels Really Better? A Model of Competition Among Commercial Television Broadcasters' ”," Marketing Science, INFORMS, vol. 25(5), pages 543-546, September.
    2. Hans Jarle Kind & Tore Nilssen & Lars Sørgard, 2009. "Business Models for Media Firms: Does Competition Matter for How They Raise Revenue?," Marketing Science, INFORMS, vol. 28(6), pages 1112-1128, 11-12.
    3. David Godes & Elie Ofek & Miklos Sarvary, 2009. "Content vs. Advertising: The Impact of Competition on Media Firm Strategy," Marketing Science, INFORMS, vol. 28(1), pages 20-35, 01-02.
    4. Fabio Caldieraro, 2016. "The Role of Brand Image and Product Characteristics on Firms’ Entry and OEM Decisions," Management Science, INFORMS, vol. 62(11), pages 3327-3350, November.

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