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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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  1. 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.
  2. Il-Horn Hann & Kai-Lung Hui & Sang-Yong Tom Lee & Ivan Png, 2005. "Consumer Privacy and Marketing Avoidance," Industrial Organization 0503009, EconWPA.
  3. Kyle Bagwell, 2005. "The Economic Analysis of Advertising," Discussion Papers 0506-01, Columbia University, Department of Economics.
  4. Hui, Kai-Lung & Png, Ivan P. L., 2005. "The Economics of Privacy," Working paper 272, Regulation2point0.
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  7. 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.
  8. Simon P. Anderson & Stephen Coate, 2003. "Market Provision of Broadcasting: A Welfare Analysis," Virginia Economics Online Papers 358, University of Virginia, Department of Economics.
  9. Mark Armstrong, 2006. "Competition in two‐sided markets," RAND Journal of Economics, RAND Corporation, vol. 37(3), pages 668-691, 09.
  10. 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.
  11. Michael R. Baye & John Morgan, 2009. "Brand and Price Advertising in Online Markets," Management Science, INFORMS, vol. 55(7), pages 1139-1151, July.
  12. Diamond, Peter A., 1971. "A model of price adjustment," Journal of Economic Theory, Elsevier, vol. 3(2), pages 156-168, June.
  13. Willmore, C., 1999. "A Penny for your Thoughts: E-Mail and the Under-Valuation of Expert Time," The Warwick Economics Research Paper Series (TWERPS) 551, University of Warwick, Department of Economics.
  14. Avinash Dixit & Victor Norman, 1978. "Advertising and Welfare," Bell Journal of Economics, The RAND Corporation, vol. 9(1), pages 1-17, Spring.
  15. Simon P. Anderson & André De Palma, 2012. "Shouting to be Heard in Advertising," Working Papers hal-00742240, HAL.
  16. Van Zandt, Timothy, 2001. "Information Overload in a Network of Targeted Communication," CEPR Discussion Papers 2836, C.E.P.R. Discussion Papers.
  17. 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.
  18. 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.
  19. Simon P. Anderson, 2005. "Market Provision of Broadcasting: A Welfare Analysis," Review of Economic Studies, Wiley Blackwell, vol. 72(4), pages 947-972, October.
  20. Stahl, Dale O, II, 1989. "Oligopolistic Pricing with Sequential Consumer Search," American Economic Review, American Economic Association, vol. 79(4), pages 700-712, September.
  21. Butters, Gerard R, 1977. "Equilibrium Distributions of Sales and Advertising Prices," Review of Economic Studies, Wiley Blackwell, vol. 44(3), pages 465-91, October.
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Citations

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Cited by:
  1. Anderson, Simon P. & Foros, Øystein & Kind, Hans Jarle & Peitz, Martin, 2011. "Media market concentration, advertising levels, and ad prices," Discussion Paper Series in Economics 24/2011, Department of Economics, Norwegian School of Economics.
  2. 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.
  3. Maarten GOOS & Patrick VAN CAYSEELE & Bert WILLEKENS, 2011. "Platform pricing in matching markets," Center for Economic Studies - Discussion papers ces11.32, Katholieke Universiteit Leuven, Centrum voor Economische Studiën.
  4. Anderson, Simon P. & de Palma, André, 2009. "Competition for attention in the information (overload) age," CEPR Discussion Papers 7286, C.E.P.R. Discussion Papers.
  5. 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.
  6. Caspar G. Chorus & Benedict G. C. Dellaert, 2012. "Travel Choice Inertia: The Joint Role of Risk Aversion and Learning," Journal of Transport Economics and Policy, London School of Economics and University of Bath, vol. 46(1), pages 139-155, January.
  7. André De Palma & Robin Lindsey & Nathalie Picard, 2008. "Risk aversion, the value of information and traffic equilibrium," Working Papers hal-00349492, HAL.
  8. Sergejs Gubins & Erik T. Verhoef & Thomas de Graaff, 2010. "Welfare Effects of Road Pricing and Traffic Information under Alternative Ownership Regimes," Tinbergen Institute Discussion Papers 10-091/3, Tinbergen Institute.
  9. Hartmut Egger & Josef Falkinger, 2013. "Limited Consumer Attention in International Trade," CESifo Working Paper Series 4166, CESifo Group Munich.
  10. Marco A. Haan & José L. Moraga‐González, 2011. "Advertising for Attention in a Consumer Search Model," Economic Journal, Royal Economic Society, vol. 121(552), pages 552-579, 05.
  11. S. Anderson & André De Palma, 2010. "Competition for attention in the information (overload) age," Working Papers hal-00517721, HAL.

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