Competing for Consumer Inattention

S-Tier
Journal: Journal of Political Economy
Year: 2014
Volume: 122
Issue: 6
Pages: 1203 - 1234

Score contribution per author:

2.691 = (α=2.02 / 3 authors) × 4.0x S-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

Consumers purchase multiple types of goods but may be able to examine only a limited number of markets for the best price. We propose a simple model that captures these features, conveying new insights. A firm's price can deflect or draw attention to its market, and consequently, limited attention introduces a new dimension of cross-market competition. We characterize the equilibrium and show that having partially attentive consumers improves consumer welfare. With less attention, consumers are more likely to miss the best offers; but enhanced cross-market competition decreases average price paid, as leading firms try to stay under the consumers' radar.

Technical Details

RePEc Handle
repec:ucp:jpolec:doi:10.1086/677253
Journal Field
General
Author Count
3
Added to Database
2026-01-25