We consider a model of strategic informative advertising where the advertising is done on TV and where the TV channels …' advertising prices are endogenously determined. We discuss how these prices, and the advertising firms' advertising efforts, vary … channels is, the higher is the advertising price, and thus the less advertising is done. …

We consider a model where TV channels transmit advertising, and viewers dislike such commercials. We find that the less … differentiated the TV channels’ programs are, the lower is the amount of advertising in equilibrium. Relative to the social optimum …, there is underprovision of advertising if TV channels are sufficiently close substitutes. In such a situation, a merger …