A Comment on “Is Having More Channels Really Better? A Model of Competition Among Commercial Television Broadcasters”

This paper shows that the analysis of Liu et al. (2004) contains a substantive error—the asserted pure-strategy Nash equilibrium leading to their Theorems 1 and 2 is really not an equilibrium. We show that in their model, either pure-strategy Nash equilibria do not exist or, unlike their asserted main result, when a pure-strategy equilibrium exists, increasing the number of commercial television broadcasters does not result in lower-quality programs. Possible modifications of Liu et al.’s model that may help restore the desired result are discussed.