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Information congestion

  • Simon P. Anderson
  • André de Palma

Unsolicited advertising messages vie for scarce attention. Junk mail, spam e-mail, and telemarketing calls need both parties to exert effort to generate transactions. Message receivers supply attention according to average message benefit, while the marginal sender determines congestion. Costlier transmission may improve average message benefit so more messages are examined. Too many (too few) 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 to receivers are moderate. The welfare results still hold when messages are presorted (triage). Copyright (c) 2009, RAND.

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

Volume (Year): 40 (2009)
Issue (Month): 4 ()
Pages: 688-709

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Handle: RePEc:bla:randje:v:40:y:2009:i:4:p:688-709
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