Competition for attention in the information (overload) age

Simon Anderson and André de Palma ()

Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) from HAL

Abstract: Limited consumer attention limits product market competition: prices are stochastically lower the more attention is paid. Ads compete to be the lowest price in a sector but compete for attention with ads from other sectors: equilibrium ad shares follow a CES form. When a sector gets more proÞtable, its advertising expands: others lose ad market share. The "information hump" shows highest ad levels for intermediate attention levels. The Information Age takes off when the number of viable sectors grows, but total ad volume reaches an upper limit. Overall, advertising is excessive, though the allocation across sectors is optimal.

Keywords: information congestion; economics of attention; information age; price dispersion; advertising distribution; consumer attention; information Þltering; size distribution of Þrms; CES; information congestion. (search for similar items in EconPapers)
Date: 2012
New Economics Papers: this item is included in nep-com and nep-mkt
Note: View the original document on HAL open archive server: https://hal.science/hal-00517721
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Citations: View citations in EconPapers (41)

Published in RAND Journal of Economics, 2012, 43 (1), pp.1-25. ⟨10.1111/j.1756-2171.2011.00155.x⟩

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Related works:
Journal Article: Competition for attention in the Information (overload) Age (2012)
Working Paper: Competition for attention in the information (overload) age (2012)
Working Paper: Competition for attention in the information (overload) age (2009)
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Persistent link: https://EconPapers.repec.org/RePEc:hal:cesptp:hal-00517721

DOI: 10.1111/j.1756-2171.2011.00155.x

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