On the strategic use of attention grabbers

Research output: Contribution to journalArticlepeer-review

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.

Original languageEnglish
Pages (from-to)127-155
Number of pages29
JournalTheoretical Economics
Volume6
Issue number1
DOIs
StatePublished - Jan 2011
Externally publishedYes

Keywords

  • Bounded rationality
  • Consideration sets
  • Conversion rates
  • Irrelevant alternatives
  • Limited attention
  • Marketing
  • Media platforms
  • Persuasion
  • Preferences over menus

All Science Journal Classification (ASJC) codes

  • General Economics,Econometrics and Finance

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