Targeted information and limited attention

Andreas Hefti and Shuo Liu

No 230, ECON - Working Papers from Department of Economics - University of Zurich

Abstract: We examine the implications of limited consumer attention for the targeting decisions of competing firms. Limited attention alters the strategic role of information provision as firms may become incentivized to behave as mass advertisers, despite perfect targeting abilities. We analyze the consequences of limited attention for targeting, strategic pricing, market shares, attention competition between firms, and the value of marketing data to firms. Accounting for limited attention in an otherwise standard targeting framework can explain several recent key issues from the advertising industry, such as consumer-side information overload or the increased usage of ad blocking tools.

Keywords: Targeted advertising; limited attention; ad avoidance; salience competition; privacy concerns (search for similar items in EconPapers)
JEL-codes: D43 L13 M37 (search for similar items in EconPapers)
Date: 2016-07, Revised 2019-12
New Economics Papers: this item is included in nep-com, nep-mic and nep-mkt
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:zur:econwp:230

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