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Information Congestion

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Author Info

  • Simon P. Anderson

    ()

  • André de Palma

    ()

Abstract

Advertising messages compete for scarce attention. ?Junk? mail, ?spam? e-mail, and telemarketing calls need both parties to exert effort to generate transactions. Message recipients supply attention depending on average message beneÞt. Senders are motivated by proÞts. Costlier message transmission may improve message quality so more messages are examined. Too many messages may be sent, or the wrong ones. A Do-Not-Call policy beats a ban, but too many individuals opt out. A monopoly gatekeeper performs better than personal access pricing if nuisance costs are moderate. The medium is the message with multiple channels, and there is excessive indiscriminate mailing.

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File URL: http://www.virginia.edu/economics/RePEc/vir/virpap/papers/virpap364.pdf
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Bibliographic Info

Paper provided by University of Virginia, Department of Economics in its series Virginia Economics Online Papers with number 364.

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Length: 39 pages
Date of creation: Jun 2006
Date of revision:
Handle: RePEc:vir:virpap:364

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Web page: http://www.virginia.edu/economics/home.html

Related research

Keywords: information overload; congestion; advertising; common property resource; overÞshing; two-sided markets; junk mail; email; telemarketing; Do Not Call List; message pricing; the Medium is the Message; market research.;

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References

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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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  1. Butters, Gerard R, 1977. "Equilibrium Distributions of Sales and Advertising Prices," Review of Economic Studies, Wiley Blackwell, vol. 44(3), pages 465-91, October.
  2. Kyle Bagwell, 2005. "The Economic Analysis of Advertising," Discussion Papers 0506-01, Columbia University, Department of Economics.
  3. repec:reg:rpubli:272 is not listed on IDEAS
  4. Diamond, Peter A., 1971. "A model of price adjustment," Journal of Economic Theory, Elsevier, vol. 3(2), pages 156-168, June.
  5. Simon P. Anderson & Regis Renault, 1999. "Pricing, product diversity, and search costs: a Bertrand-Chamberlin-Diamond model," Virginia Economics Online Papers 335, University of Virginia, Department of Economics.
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  8. Michael R. Baye & John Morgan, 2009. "Brand and Price Advertising in Online Markets," Management Science, INFORMS, vol. 55(7), pages 1139-1151, July.
  9. Simon P. Anderson & André De Palma, 2012. "Shouting to be Heard in Advertising," Working Papers hal-00742240, HAL.
  10. Stahl, Dale O, II, 1989. "Oligopolistic Pricing with Sequential Consumer Search," American Economic Review, American Economic Association, vol. 79(4), pages 700-712, September.
  11. Grossman, Gene M & Shapiro, Carl, 1984. "Informative Advertising with Differentiated Products," Review of Economic Studies, Wiley Blackwell, vol. 51(1), pages 63-81, January.
  12. Timothy Van Zandt, 2004. "Information Overload in a Network of Targeted Communication," RAND Journal of Economics, The RAND Corporation, vol. 35(3), pages 542-560, Autumn.
  13. Simon P. Anderson & Stephen Coate, 2005. "Market Provision of Broadcasting: A Welfare Analysis," Review of Economic Studies, Oxford University Press, vol. 72(4), pages 947-972.
  14. Doh Shin Jeon & Jean Jacques Laffont & Jean Tirole, 2001. "On the receiver pays principle," Economics Working Papers 561, Department of Economics and Business, Universitat Pompeu Fabra.
  15. Benjamin E. Hermalin & Michael L. Katz, 2004. "Sender or Receiver: Who Should Pay to Exchange an Electronic Message?," RAND Journal of Economics, The RAND Corporation, vol. 35(3), pages 423-447, Autumn.
  16. Engers, Maxim & Gans, Joshua S, 1998. "Why Referees Are Not Paid (Enough)," American Economic Review, American Economic Association, vol. 88(5), pages 1341-49, December.
  17. Robert, Jacques & Stahl, Dale O, II, 1993. "Informative Price Advertising in a Sequential Search Model," Econometrica, Econometric Society, vol. 61(3), pages 657-86, May.
  18. Il-Horn Hann & Kai-Lung Hui & Sang-Yong Tom Lee & Ivan Png, 2005. "Consumer Privacy and Marketing Avoidance," Industrial Organization 0503009, EconWPA.
  19. repec:rje:randje:v:37:y:2006:3:p:668-691 is not listed on IDEAS
  20. Hui, Kai-Lung & Png, Ivan P. L., 2005. "The Economics of Privacy," Working paper 272, Regulation2point0.
  21. Spence, Michael, 1976. "Product Selection, Fixed Costs, and Monopolistic Competition," Review of Economic Studies, Wiley Blackwell, vol. 43(2), pages 217-35, June.
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Citations

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Cited by:
  1. Simon P. Anderson & Oystein Foros & Hans Jarle Kind & Martin Peitz, 2011. "Media Market Concentration, Advertising Levels, and Ad Prices," CESifo Working Paper Series 3677, CESifo Group Munich.
  2. Khim Yong, Goh & Kai-Lung, Hui & I.P.L., Png, 2008. "Social Interaction, Observational Learning, and Privacy: the "Do Not Call" Registry," MPRA Paper 8225, University Library of Munich, Germany.
  3. Marco A. Haan & Jose Luis Moraga-Gonzalez, 2009. "Advertising for Attention in a Consumer Search Model," Tinbergen Institute Discussion Papers 09-031/1, Tinbergen Institute.
  4. Gubins, Sergejs & Verhoef, Erik T. & de Graaff, Thomas, 2012. "Welfare effects of road pricing and traffic information under alternative ownership regimes," Transportation Research Part A: Policy and Practice, Elsevier, vol. 46(8), pages 1304-1317.
  5. Maria Arbatskaya & Hideo Konishi, 2014. "Managing Consumer Referrals in a Chain Network," Boston College Working Papers in Economics 850, Boston College Department of Economics.
  6. repec:hal:cesptp:hal-00517721 is not listed on IDEAS
  7. Maria Arbatskaya & Hideo Konishi, 2013. "Consumer Referrals," Emory Economics 1310, Department of Economics, Emory University (Atlanta).
  8. Hartmut Egger & Josef Falkinger, 2013. "Limited Consumer Attention in International Trade," CESifo Working Paper Series 4166, CESifo Group Munich.
  9. Simon P. Anderson & André de Palma, 2012. "Competition for attention in the Information (overload) Age," RAND Journal of Economics, RAND Corporation, vol. 43(1), pages 1-25, 03.
  10. Chiao, Benjamin & MacKie-Mason, Jeffrey, 2012. "Using uncensored communication channels to divert spam traffic," Information Economics and Policy, Elsevier, vol. 24(3), pages 173-186.
  11. Maria Arbatskaya & Hideo Konishi, 2013. "Consumer Referrals," Boston College Working Papers in Economics 851, Boston College Department of Economics.
  12. André De Palma & Robin Lindsey & Nathalie Picard, 2008. "Risk aversion, the value of information and traffic equilibrium," Working Papers hal-00349492, HAL.

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