Bryan Caplan  

General Equilibrium: The Reality Series

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There is some fascinating economics in the latest issue of Entertainment Weekly (sorry, not online yet). The article "No Funny Business" explains that the rise of reality tv five years or so ago is just now starting to exert a powerful effect on sitcom syndication. How are the two connected?

Given that the six broadcasters have collectively launched one hit sitcom [Two and a Half Men] in the last five years, the syndication market - which feeds successful five- and six-year old sitcoms to cable networks and to local stations that use them to fill pre- and post-prime-time slots - is suffering from a severe case of malnourishment... [T]he prices of proven series have soared to ridiculous levels.

Friends is up to $4 M an episode.

Where does reality tv fit in?

The success of reality shows and procedural dramas has not filled the syndication void (in general, they don't rate as highly in reruns) and has significantly curtailed comedy development. In the last seven years, the number of new sitcoms on the networks' fall schedules has shrunk from 36 to 10. The most troublesome aspect of the comedy crisis is that even in the best-case scenario - if all 10 of the networks' new comedies are resounding hits - the syndication market will continue hurting for five years until these shows reach the magical 100-episode mark that's necessary for a successful syndication launch.

In practice, the main use of general equilibrium theory is to torture first-year graduate students with the hardest math they'll never use again (unless they go on to teach it themselves!). But that's a problem with the pedagogy, not the material.

The deep lesson of general equilibrium theory is that markets are inter-connected in countless subtle ways. If you throw a stone into the water of the market, it doesn't ripple out in concentric circles. The ripples are many and irregular. Analyzing the effect of the reality craze of five years ago on syndicated sitcoms today is actually one of the easier connections to understand.

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The author at The Club for Growth Blog in a related article titled Monday's Daily News writes:
    Lincoln Chafee: ‘I’ve Got a Target on My Back’ - “GROW Accounts” Beckon - Donald Lambro, Washington Times Genuine Lockbox - Michael Tanner, Washington Times Senators Should Drop Death Tax - P. Gessing, SeattlePI.... [Tracked on August 22, 2005 9:20 AM]
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dsquared writes:

Bryan, what are you teaching these undergraduates? While it's certainly true that "markets are inter-connected in countless subtle ways", this isn't exactly something that you're going to learn from general equilibrium theory. The only way in which a general equilibrium result can be proved at all involves making very restrictive assumptions which effectively iron out all the differences between commodities.

Todd Kendall writes:

I suspect it's not so much the reality TV craze as it is the vastly improved and increasingly popular TV dramas. Practically all the hit shows from the last 5-7 years have been dramas (L&O + variants, CSI + variants, Desperate Housewives, etc.).

These kinds of shows don't syndicate easily to the pre-primetime hours where Friends, Seinfeld, and the Simpsons are the norm, but they have syndicated endlessly to cable on USA, TNT, etc., where the hour-long format is easier to handle.

A more interesting question to me is why dramas have gotten so much better and/or more popular relative to comedies.

Brad Hutchings writes:

I heard from a friend of my parents who have a kid in the local TV programming business, that the stations are currently purchasing rights in shows for syndication that can't be exercised for five or more years, and for shows that don't yet have the minimum run for syndication! It's almost like a futures market in syndication. Who knows how accurate the anecdote is, but it might be relevant ;-).

Paul N writes:

Illustrating the sadness of the situation, I think it is now possible to watch Full House round-the-clock if you have satellite TV.

At least the Cosby Show is still funny.

Robert Schwartz writes:

I am waiting for re-runs of Our Miss Brooks and the Sgt. Bilko Show

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