This paper investigates how regulations that limit advertising airtime may affect advertising quality and social welfare. I show, first, conditions under which an advertising cap may reduce or improve the average quality of advertising broadcast on a free-to-air TV platform. Second, an advertising cap may reduce TV platform’s and firms’ profits, while the net effect on viewers’ welfare is ambiguous because the ad quality may decrease as a result of a regulatory cap offsetting the direct gain from watching fewer ads. The results suggest that a regulator that is trying to increase social welfare via regulation of the volume of advertising on TV should take the effect of advertising quality into consideration. Implementing an advertising cap without regard to ad quality may result in lower social welfare than leaving advertising airtime unregulated.

本文调查了限制广告播出时间的法规如何影响广告质量和社会福利。首先，我展示了在哪些条件下广告上限可能会降低或提高免费电视平台上广告广播的平均质量。其次，广告上限可能会降低电视平台和公司的利润，而对观众福利的净影响是不明确的，因为监管上限抵消了观看较少广告的直接收益，因此广告质量可能会下降。结果表明，试图通过监管电视广告量来增加社会福利的监管机构应该考虑广告质量的影响。在不考虑广告质量的情况下实施广告上限可能比让广告播出时间不受管制会导致更低的社会福利。