Competing for Consumer Inattention

Geoffroy de Clippel, Kfir Eliaz and Kareen Rozen

No 275830, Foerder Institute for Economic Research Working Papers from Tel-Aviv University > Foerder Institute for Economic Research

Abstract: Consumers purchase multiple types of goods, but may be able to examine only a limited number of markets for the best price. We propose a simple model which captures these features, conveying new insights. A rm's price can de ect or draw attention to its market, and consequently, limited attention introduces a new dimension of cross-market competition. We characterize the equilibrium, and show that having partially attentive consumers improves consumer welfare. With less attention, consumers are more likely to miss the best oers; but enhanced cross-market competition decreases average price paid, as leading rms try to stay under the consumers' radar.

Keywords: Consumer/Household Economics; Financial Economics (search for similar items in EconPapers)
Pages: 41
Date: 2014-02
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Citations: View citations in EconPapers (41)

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Related works:
Working Paper: Competing for Consumer Inattention (2013)
Working Paper: Competing for Consumer Inattention (2013)
Working Paper: Competing for Consumer Inattention (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:ags:isfiwp:275830

DOI: 10.22004/ag.econ.275830

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