Contracts between a Content Provider and Asymmetric Broadcasters: “Burn‐boats” or “Build‐boats” Strategy = Contracts between a Content Provider and Asymmetric Broadcasters: “Burn‐boats” or “Build‐boats” Strategy

다국어 초록 (Multilingual Abstract)

This paper provides a theoretical analysis of the contract between a content provider and two asymmetric broadcasters. We adopt a two‐stage dynamic game model and investigate a subgame perfect Nash equilibrium through backward induction.
The main implication is that a monopolistic content provider should contract exclusively with the inferior broadcaster (whose own program or best alternative available has the lower audience rating) rather than the superior broadcaster (whose own program or best alternative available has the higher audience rating).
However, its strategy of setting the broadcasting fee varies according to the popularity of its content. When the content is quite popular, the provider should adopt a “build‐boats” strategy and threaten the inferior broadcaster with a potential exclusive contract with the superior broadcaster (by maintaining the chance to contract with the latter). When the content is not popular enough, it should adopt a “burn‐boats” strategy and convince the inferior broadcaster of its exclusive contract (by abandoning the chance to contract with the superior broadcaster).

참고문헌 (Reference)

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