Premium
Targeted information and limited attention
Author(s) -
Hefti Andreas,
Liu Shuo
Publication year - 2020
Publication title -
the rand journal of economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 3.687
H-Index - 108
eISSN - 1756-2171
pISSN - 0741-6261
DOI - 10.1111/1756-2171.12319
Subject(s) - business , competition (biology) , key (lock) , information overload , value (mathematics) , marketing , industrial organization , mechanism (biology) , computer science , ecology , philosophy , epistemology , machine learning , biology , computer security , world wide web
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.