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A communication model with limited information‐processing capacity of recipients

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  • Oleg V. Pavlov
  • Robert K. Plice
  • Nigel P. Melville

Abstract

We develop a system dynamics model of message‐based communication, where the information‐processing capacity of message recipients is limited. Profit‐seeking broadcasters send messages, but only some of these messages are valuable to recipients. Recipients cannot determine whether or not a message is valuable until it is processed. Information overload occurs when more messages arrive than recipients can process. Numerical experiments test alternative approaches for mitigating information overload. We show that message filtering can increase the flow of for‐profit communication. Market‐based mechanisms, while aimed at improving the social outcome, can actually lead to suboptimal results and to a complete collapse of for‐profit communication. Copyright © 2008 John Wiley & Sons, Ltd.

Suggested Citation

  • Oleg V. Pavlov & Robert K. Plice & Nigel P. Melville, 2008. "A communication model with limited information‐processing capacity of recipients," System Dynamics Review, System Dynamics Society, vol. 24(3), pages 377-405, September.
    • Handle: RePEc:bla:sysdyn:v:24:y:2008:i:3:p:377-405
    DOI: 10.1002/sdr.407
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    References listed on IDEAS

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    1. Timothy Van Zandt, 2004. "Information Overload in a Network of Targeted Communication," RAND Journal of Economics, The RAND Corporation, vol. 35(3), pages 542-560, Autumn.
    2. Martin, Brett A. S. & Van Durme, Joël & Raulas, Mika & Merisavo, Marko, 2003. "Email Advertising: Exploratory Insights from Finland," Journal of Advertising Research, Cambridge University Press, vol. 43(3), pages 293-300, September.
    3. Loder Theodore & Van Alstyne Marshall & Wash Rick, 2006. "An Economic Response to Unsolicited Communication," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 6(1), pages 1-38, March.
    4. Oleg V. Pavlov & Nigel Melville, 2005. "Mitigating the Tragedy of the Digital Commons: the Case of Unsolicited Commercial Email," Computing in Economics and Finance 2005 231, Society for Computational Economics.
    5. Rust, Roland T. & Espinoza, Francine, 2006. "How technology advances influence business research and marketing strategy," Journal of Business Research, Elsevier, vol. 59(10-11), pages 1072-1078, October.
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    Cited by:

    1. Oleg V. Pavlov & Evangelos Katsamakas, 2024. "Tuition too high? Blame competition," Papers 2405.17762, arXiv.org.
    2. Pavlov, Oleg V. & Katsamakas, Evangelos, 2023. "Tuition too high? Blame competition," Journal of Economic Behavior & Organization, Elsevier, vol. 213(C), pages 409-431.

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