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The Empirical Economics of Online Attention

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  • Andre Boik
  • Shane Greenstein
  • Jeffrey Prince

Abstract

In several markets, firms compete not for consumer expenditure but instead for consumer attention. We model and characterize how households allocate their scarce attention in arguably the largest market for attention: the Internet. Our characterization of household attention allocation operates along three dimensions: how much attention is allocated, where that attention is allocated, and how that attention is allocated. Using click-stream data for thousands of U.S. households, we assess if and how attention allocation on each dimension changed between 2008 and 2013, a time of large increases in online offerings. We identify vast and expected changes in where households allocate their attention (away from chat and news towards video and social media), and yet we simultaneously identify remarkable stability in how much attention is allocated and how it is allocated. Specifically, we identify (i) persistence in the elasticity of attention according to income and (ii) complete stability in the dispersion of attention across sites and in the intensity of attention within sites. We illustrate how this finding is difficult to reconcile with standard models of optimal attention allocation and suggest alternatives that may be more suitable. We conclude that increasingly valuable offerings change where households go online, but not their general online attention patterns. This conclusion has important implications for competition and welfare in other markets for attention.

Suggested Citation

  • Andre Boik & Shane Greenstein & Jeffrey Prince, 2016. "The Empirical Economics of Online Attention," NBER Working Papers 22427, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:22427
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    References listed on IDEAS

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    Cited by:

    1. Han Yuan, 2020. "Competing for Time: A Study of Mobile Applications," 2020 Papers pyu309, Job Market Papers.
    2. Jeon, Doh-Shin, 2018. "Economics of News Aggregators," TSE Working Papers 18-912, Toulouse School of Economics (TSE).
    3. Cali Curley & Galib Rustamov & Nicky Harrison & Madeline Venable, 2020. "Susceptibility to Inattention: Unpacking Who is Susceptible to Inattention in Energy‐Based Electronic Billing," Review of Policy Research, Policy Studies Organization, vol. 37(6), pages 744-764, November.
    4. Luis Aguiar Wicht, 2019. "Going Mobile: The Effects of Smartphone Usage on Internet Consumption," JRC Working Papers on Digital Economy 2019-07, Joint Research Centre (Seville site).
    5. Oliver Budzinski & Sophia Gaenssle & Nadine Lindstädt-Dreusicke, 2021. "The battle of YouTube, TV and Netflix: an empirical analysis of competition in audiovisual media markets," SN Business & Economics, Springer, vol. 1(9), pages 1-26, September.
    6. Du, Kai & Song, Jinyuan, 2022. "The impact of geotargeting on household information acquisition: Evidence from a Google News redesign," Research Policy, Elsevier, vol. 51(10).
    7. Peitz, Martin, 2020. "Economic policy for digital attention intermediaries," ZEW Discussion Papers 20-035, ZEW - Leibniz Centre for European Economic Research.
    8. Hildebrandt, Christian & Arnold, René, 2018. "Marktbeobachtung in der digitalen Wirtschaft – Ein Modell zur Analyse von Online-Plattformen," WIK Discussion Papers 427, WIK Wissenschaftliches Institut für Infrastruktur und Kommunikationsdienste GmbH.
    9. Charles Hodgson & Gregory Lewis, 2020. "You Can Lead a Horse to Water: Spatial Learning and Path Dependence in Consumer Search," Cowles Foundation Discussion Papers 2246, Cowles Foundation for Research in Economics, Yale University.
    10. Tim Meyer & Anna Kerkhof & Carmelo Cennamo & Tobias Kretschmer, 2022. "Competing for Attention on Information Platforms: The Case of News," CESifo Working Paper Series 9832, CESifo.

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    More about this item

    JEL classification:

    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • L81 - Industrial Organization - - Industry Studies: Services - - - Retail and Wholesale Trade; e-Commerce
    • L86 - Industrial Organization - - Industry Studies: Services - - - Information and Internet Services; Computer Software

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