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Shouting to Be Heard in Advertising

Author

Listed:
  • Simon P. Anderson

    (Department of Economics, University of Virginia, Charlottesville, Virginia 22904)

  • André de Palma

    (Centre d'Economie de la Sorbonne, 75647 Paris, Cedex 13, France; and Ecole Normale Supérieure de Cachan, 94235 Cachan, France)

Abstract

Advertising competes for scarce consumer attention, so more profitable advertisers send more messages to break through the others' clutter. Multiple equilibria can arise: more messages in aggregate induce more “shouting to be heard,” dissipating profit. Equilibria can involve a small range of loud shouters or large range of quiet whisperers. All advertisers prefer there to be less shouting. There is the largest diversity in message levels for a middling width of advertiser types: both very wide and very narrow widths have only one message per advertiser. The number of advertisers at each message level decreases with the level if the profit distribution is log-convex. Increasing the cost of sending messages can make all advertisers better off. A new technique is given for describing multiple equilibria, by determining how much examination is consistent with a given marginal advertiser. This paper was accepted by J. Miguel Villas-Boas, marketing.

Suggested Citation

  • Simon P. Anderson & André de Palma, 2013. "Shouting to Be Heard in Advertising," Management Science, INFORMS, vol. 59(7), pages 1545-1556, July.
    • Handle: RePEc:inm:ormnsc:v:59:y:2013:i:7:p:1545-1556
    DOI: 10.1287/mnsc.1120.1682
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    References listed on IDEAS

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    Cited by:

    1. Bourreau, Marc & Doğan, Pınar & Hong, Sounman, 2015. "Making money by giving it for free: Radiohead’s pre-release strategy for In Rainbows," Information Economics and Policy, Elsevier, vol. 32(C), pages 77-93.
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    3. Simon P. Anderson & André De Palma, 2009. "Information congestion," RAND Journal of Economics, RAND Corporation, vol. 40(4), pages 688-709, December.
    4. Young Hou & Christopher W. Poliquin, 2023. "The effects of CEO activism: Partisan consumer behavior and its duration," Strategic Management Journal, Wiley Blackwell, vol. 44(3), pages 672-703, March.

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