Competition for attention in the Information (overload) Age
AbstractLimited consumer attention limits product market competition: prices are stochastically lower the more attention is paid. Ads compete to be the lowest price in a sector but compete for attention with ads from other sectors: equilibrium ad shares follow a CES form. When a sector gets more proÃtable, its advertising expands: others lose ad market share. The "information hump" shows highest ad levels for intermediate attention levels. The Information Age takes off when the number of viable sectors grows, but total ad volume reaches an upper limit. Overall, advertising is excessive, though the allocation across sectors is optimal.
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Bibliographic InfoArticle provided by RAND Corporation in its journal RAND Journal of Economics.
Volume (Year): 43 (2012)
Issue (Month): 1 (03)
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Other versions of this item:
- Anderson, Simon P. & de Palma, André, 2009. "Competition for attention in the information (overload) age," CEPR Discussion Papers 7286, C.E.P.R. Discussion Papers.
- S. Anderson & André De Palma, 2010. "Competition for attention in the information (overload) age," Working Papers hal-00517721, HAL.
- D11 - Microeconomics - - Household Behavior - - - Consumer Economics: Theory
- D60 - Microeconomics - - Welfare Economics - - - General
- I0 - Health, Education, and Welfare - - General
- L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
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