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Advertising for Attention in a Consumer Search Model

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Author Info
Marco A. Haan () (University of Groningen)
José Luis Moraga-González () (University of Groningen)

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Abstract

We model the idea that when consumers search for products, they first visit the firm whose advertising is more salient. The gains a firm derives from being visited early increase in search costs, so equilibrium advertising increases as search costs rise. This may result in lower firm profits when search costs increase. We extend the basic model by allowing for firm heterogeneity in advertising costs.

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Paper provided by Tinbergen Institute in its series Tinbergen Institute Discussion Papers with number 09-031/1.

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Date of creation: 16 Apr 2009
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Handle: RePEc:dgr:uvatin:20090031

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Related research
Keywords: Advertising; attention; consumer search; saliency;

Other versions of this item:

Find related papers by JEL classification:
D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search, Learning, and Information
L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
M37 - Business Administration and Business Economics; Marketing; Accounting - - Marketing and Advertising - - - Advertising

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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    Other versions:
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    Other versions:
  3. Rauh, Michael T., 2004. "Wage and price controls in the equilibrium sequential search model," European Economic Review, Elsevier, vol. 48(6), pages 1287-1300, December. [Downloadable!] (restricted)
  4. Rauh, Michael T., 2007. "Nonstandard foundations of equilibrium search models," Journal of Economic Theory, Elsevier, vol. 132(1), pages 518-529, January. [Downloadable!] (restricted)
    Other versions:
  5. Kyle Bagwell, 2005. "The Economic Analysis of Advertising," Discussion Papers 0506-01, Columbia University, Department of Economics. [Downloadable!]
    Other versions:
  6. Kooreman, Peter & Schoonbeek, Lambert, 1997. "The specification of the probability functions in Tullock's rent-seeking contest," Economics Letters, Elsevier, vol. 56(1), pages 59-61, September. [Downloadable!] (restricted)
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    Other versions:
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    Other versions:
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Jidong Zhou, 2009. "Ordered Search in Differentiated Markets," EERI Research Paper Series EERI_RP_2009_28, Economics and Econometrics Research Institute (EERI). [Downloadable!]
    Other versions:
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