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Shouting to be Heard in Advertising

Author

Listed:
  • Simon P. Anderson

    (Department of Economics, University of Virginia - Uniiversity of Virginia)

  • André de Palma

    (ENS Cachan - École normale supérieure - Cachan)

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 a very wide or very narrow width 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.

Suggested Citation

  • Simon P. Anderson & André de Palma, 2012. "Shouting to be Heard in Advertising," Working Papers hal-00742240, HAL.
    • Handle: RePEc:hal:wpaper:hal-00742240
    Note: View the original document on HAL open archive server: https://hal.science/hal-00742240
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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.
    2. Jan Krämer & Daniel Schnurr & Michael Wohlfarth, 2019. "Winners, Losers, and Facebook: The Role of Social Logins in the Online Advertising Ecosystem," Management Science, INFORMS, vol. 65(4), pages 1678-1699, April.
    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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    Keywords

    information overload; congestion; advertising; lottery; junk mail; e-mail; tele-marketing; multiple equilibria; ad caps;
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