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Information Overload in a Network of Targeted Communication

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  • Timothy Van Zandt

    ()
    (INSEAD)

Abstract

As the costs of generating and transmitting information fall, the main bottlenecks in communication are becoming the human receivers, who are overloaded with information. For networks of targeted communication, I discuss the meaning of information overload, provide a theoretical treatment as the outcome of strategic interaction between senders, and examine mechanisms for allocating the attention of receivers. Such mechanisms increase the cost of sending messages and thereby shift the task of screening messages from the receivers to the senders, who know the contents of the messages. If the communication cost is low, then a tax on sending messages benefits all the senders if either the tax is redistributed to them as lump-sum transfers or their information about the receivers is sufficiently accurate.

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Article provided by The RAND Corporation in its journal RAND Journal of Economics.

Volume (Year): 35 (2004)
Issue (Month): 3 (Autumn)
Pages: 542-560

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Handle: RePEc:rje:randje:v:35:y:2004:3:p:542-560

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  1. Grossman, Gene M & Shapiro, Carl, 1984. "Informative Advertising with Differentiated Products," Review of Economic Studies, Wiley Blackwell, Wiley Blackwell, vol. 51(1), pages 63-81, January.
  2. Stahl, Dale O, II, 1989. "Oligopolistic Pricing with Sequential Consumer Search," American Economic Review, American Economic Association, American Economic Association, vol. 79(4), pages 700-712, September.
  3. Stegeman, Mark, 1991. "Advertising in Competitive Markets," American Economic Review, American Economic Association, American Economic Association, vol. 81(1), pages 210-23, March.
  4. Diamond, Peter A., 1971. "A model of price adjustment," Journal of Economic Theory, Elsevier, Elsevier, vol. 3(2), pages 156-168, June.
  5. Robert, Jacques & Stahl, Dale O, II, 1993. "Informative Price Advertising in a Sequential Search Model," Econometrica, Econometric Society, Econometric Society, vol. 61(3), pages 657-86, May.
  6. Butters, Gerard R, 1977. "Equilibrium Distributions of Sales and Advertising Prices," Review of Economic Studies, Wiley Blackwell, Wiley Blackwell, vol. 44(3), pages 465-91, October.
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