Publication

The Strategic Timing of Radio Commercials: An Empirical Analysis Using Multiple Equilibria

Andrew Sweeting , RAND Journal of Economics 40(4) , 710-742 , October 2009.
Abstract:

Commercial radio stations and advertisers may have conflicting interests about when commercial breaks should be played. This article estimates an incomplete information timing game to examine stations’ equilibrium timing incentives. It shows how identification can be aided by the existence of multiple equilibria when appropriate data are available. It finds that stations want to play their commercials at the same time, suggesting that stations’ incentives are at least partially aligned with the interests of advertisers, although equilibrium coordination is far from perfect. Coordination incentives are much stronger during drivetime hours, when more listeners switch stations, and in smaller markets.

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