Open AccessOn the strategic use of attention grabbers
Author(s) -
Eliaz Kfir,
Spiegler Ran
Publication year - 2011
Publication title -
theoretical economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 4.404
H-Index - 32
eISSN - 1555-7561
pISSN - 1933-6837
DOI - 10.3982/te758
Subject(s) - stylized fact , context (archaeology) , business , competition (biology) , product differentiation , newspaper , product (mathematics) , advertising , value (mathematics) , the internet , microeconomics , marketing , industrial organization , economics , computer science , paleontology , ecology , geometry , mathematics , macroeconomics , machine learning , cournot competition , world wide web , biology
When a firm decides which products to offer or put on display, it takes into account the products' ability to attract attention to the brand name as a whole. Thus, the value of a product to the firm emanates from the consumer demand it directly meets, as well as the indirect demand it generates for the firms' other products. We explore this idea in the context of a stylized model of competition between media content providers (broadcast TV channels, internet portals, newspapers) over consumers with limited attention. We characterize the equilibrium use of products as attention grabbers and its implications for consumer conversion, industry profits, and (mostly vertical) product differentiation.