Publication type: Working paper – expertise – study
Title: Targeted information and limited attention
Authors: Hefti, Andreas
Liu, Shuo
DOI: 10.5167/uzh-124916
Extent: 42
Issue Date: 2016
Series: Working paper series / Department of Economics
Series volume: 230
Publisher / Ed. Institution: Universität Zürich
Publisher / Ed. Institution: Zürich
ISSN: 1664-7041
Language: English
Subjects: Advertising; Bounded rationality; Ad avoidance; Differentiation; Information tax; Limited attention; Oligopolistic competition; Privacy concerns; Salience competition; Targeted advertising; Targeting
Subject (DDC): 659: Advertising and public relations
Abstract: We examine the implications of limited consumer attention for the decisions of competing firms which consumers to target with their messages. Limited attention changes the conventional strategic role of targeted information, as information-senders may profitably intrude a competitor’s segment of prime consumers. Therefore, the presence of inattentive consumers can incentivize firms to behave as mass-advertisers, even if firms had the ability to direct their messages at infinite precision towards consumers with the most aligned preferences. Anticipating that the equilibrium information provision will not reflect their preferences, consumers with high nuisance costs optimally decide to block information. This adverse effect of information dissemination can explain the recently observed increased use of ad blocking tools by consumers, which has become a key issue to the entire advertising industry. Within the targeting framework, we further analyze the consequences of limited attention for the determinants of market shares, information taxation, attention competition between firms, the value of marketing data to firms, consumer privacy concerns and firm pricing strategies.
License (according to publishing contract): Licence according to publishing contract
Departement: School of Management and Law
Organisational Unit: Center for Economic Policy (FWP)
Appears in collections:Publikationen School of Management and Law

Files in This Item:
There are no files associated with this item.

Items in DSpace are protected by copyright, with all rights reserved, unless otherwise indicated.