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Competition for attention in the Information (overload) Age
Author(s) -
Anderson Simon P.,
de Palma André
Publication year - 2012
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/j.1756-2171.2011.00155.x
Subject(s) - information overload , blame , competition (biology) , economics , information transmission , elasticity of substitution , product (mathematics) , microeconomics , industrial organization , business , production (economics) , computer science , psychology , ecology , computer network , geometry , mathematics , psychiatry , world wide web , biology
The Information Age has a surfeit of information received relative to what is processed. We model multiple sectors competing for consumer attention, with competition in price within each sector. Sector advertising levels follow a constant elasticity of substitution (CES) form, and within‐sector prices are dispersed with a truncated Pareto distribution. The “information hump” shows highest ad levels for intermediate attention levels. Overall, advertising is excessive, although the allocation across sectors is optimal. The blame for information overload falls most on product categories with low information transmission costs and low profits .