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Competing for Attention: Is the Showiest also the Best?

  • Paola Manzini

    ()

    (University of St Andrews and IZA)

  • Marco Mariotti

    ()

    (Queen Mary University of London)

There are many situations in which alternatives ranked by quality wish to be chosen and compete for the imperfect attention of a chooser by selecting their own salience. The chooser may be “tricked" into choosing more salient but inferior alter- natives. We investigate when competitive forces ensure instead that “the showiest is the best", that is, when the best alternative is maximally salient (and the one that gets picked most often) in equilibrium. We prove that the structure of externalities in the technology of salience is key. Broadly speaking, positive externalities favour correlation between quality and salience.

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Paper provided by Department of Economics, University of St. Andrews in its series Discussion Paper Series, Department of Economics with number 201403.

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Date of creation: 08 Apr 2014
Date of revision: 14 Apr 2015
Handle: RePEc:san:wpecon:1403
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  1. Babin, Barry J & Darden, William R & Griffin, Mitch, 1994. " Work and/or Fun: Measuring Hedonic and Utilitarian Shopping Value," Journal of Consumer Research, University of Chicago Press, vol. 20(4), pages 644-56, March.
  2. Ron Siegel, 2009. "All-Pay Contests," Econometrica, Econometric Society, vol. 77(1), pages 71-92, 01.
  3. Eliaz, Kfir & Spiegler, Ran, 2010. "On the Strategic Use of Attention Grabbers," CEPR Discussion Papers 7863, C.E.P.R. Discussion Papers.
  4. Geoffroy De Clippel & Kfir Eliaz & Kareen Rozen, 2013. "Competing for Consumer Inattention," Levine's Working Paper Archive 786969000000000765, David K. Levine.
  5. Michelle Sovinsky Goeree, 2008. "Limited Information and Advertising in the U.S. Personal Computer Industry," Econometrica, Econometric Society, vol. 76(5), pages 1017-1074, 09.
  6. Paola Manzini & Marco Mariotti, 2012. "Stochastic Choice and Consideration Sets," CEEL Working Papers 1205, Cognitive and Experimental Economics Laboratory, Department of Economics, University of Trento, Italia.
  7. Kfir Eliaz & Ran Spiegler, 2011. "Consideration Sets and Competitive Marketing," Review of Economic Studies, Oxford University Press, vol. 78(1), pages 235-262.
  8. Elena Reutskaja & Rosemarie Nagel & Colin F. Camerer & Antonio Rangel, 2011. "Search Dynamics in Consumer Choice under Time Pressure: An Eye-Tracking Study," American Economic Review, American Economic Association, vol. 101(2), pages 900-926, April.
  9. Michelle Sovinsky Goeree, 2005. "Advertising in the US Personal Computer Industry," Industrial Organization 0503002, EconWPA.
  10. Butters, Gerard R, 1977. "Equilibrium Distributions of Sales and Advertising Prices," Review of Economic Studies, Wiley Blackwell, vol. 44(3), pages 465-91, October.
  11. Bagwell, Kyle, 2007. "The Economic Analysis of Advertising," Handbook of Industrial Organization, Elsevier.
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