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On the strategic use of attention grabbers

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  • ,

    (Department of Economics, Brown University)

  • ,

    (Department of Economics, University College London and Tel Aviv University)

Abstract

When a firm decides which products to offer or put on display, it takes into account the products' ability to attract attention to the brand name as a whole. Thus, the value of a product to the firm emanates from the consumer demand it directly meets, as well as the indirect demand it generates for the firms' other products. We explore this idea in the context of a stylzed model of competition between media content providers (broadcast TV channels, internet portals, newspapers) over consumers with limited attention. We characterize the equilibrium use of products as attention grabbers and its implications for consumer conversion, industry profits and (mostly vertical) product differentiation.

Suggested Citation

  • , & ,, 2011. "On the strategic use of attention grabbers," Theoretical Economics, Econometric Society, vol. 6(1), January.
    • Handle: RePEc:the:publsh:758
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    More about this item

    Keywords

    Bounded rationality; irrelevant alternatives; limited attention; consideration sets; preferences over menus; marketing; persuasion; conversion rates; media platforms;
    All these keywords.

    JEL classification:

    • C79 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Other
    • D03 - Microeconomics - - General - - - Behavioral Microeconomics: Underlying Principles
    • M39 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Marketing and Advertising - - - Other

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