Citation

Discussion Paper Details

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Title: On the Strategic Use of Attention Grabbers

Author(s): Kfir Eliaz and Ran Spiegler

Publication Date: June 2010

Keyword(s): bounded rationality, consideration sets, conversion rate, irrelevant alternatives, limited attention, marketing, media platforms, persuasion and preferences over menus

Programme Area(s): Industrial Organization

Abstract: 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.

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Bibliographic Reference

Eliaz, K and Spiegler, R. 2010. 'On the Strategic Use of Attention Grabbers'. London, Centre for Economic Policy Research. https://cepr.org/active/publications/discussion_papers/dp.php?dpno=7863