The Strategic Timing Incentives of Commercial Radio Stations: An Empirical Analysis Using Multiple Equilibria
Commercial radio stations and advertisers have potentially conflicting interests about when commercial breaks should be played. This paper 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 mechanisms exist which align the incentives of stations with the interests of advertisers. It also shows that coordination incentives are much stronger during drivetime hours, when more listeners switch stations, and in smaller markets.
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