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Ad Clutter, Time Use and Media Diversity

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  • Simon P. Anderson
  • Martin Peitz

Abstract

We introduce advertising congestion along with a time-use model of consumer choice among media. Both consumers and advertisers multi-home. Higher equilibrium advertising levels ensue on less popular media platforms because platforms treat consumer attention as a common property resource: smaller platforms internalize less the congestion from advertising and so advertise more. Platform entry raises the ad nuisance price to consumers and diminishes the quality of the consumption experience on all platforms. With symmetric platforms, entry still leads to higher consumer benets. However, entry of less attractive platforms can increase ad nuisance levels so much that consumeres are worse off.

Suggested Citation

  • Simon P. Anderson & Martin Peitz, 2020. "Ad Clutter, Time Use and Media Diversity," CRC TR 224 Discussion Paper Series crctr224_2019_140v2, University of Bonn and University of Mannheim, Germany.
    • Handle: RePEc:bon:boncrc:crctr224_2019_140v2
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    File URL: https://www.crctr224.de/research/discussion-papers/archive/dp140
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    References listed on IDEAS

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    Cited by:

    1. Martin Peitz, 2024. "Digital Attention Intermediaries," CRC TR 224 Discussion Paper Series crctr224_2024_520, University of Bonn and University of Mannheim, Germany.
    2. Flavio Pino, 2022. "The microeconomics of data – a survey," Economia e Politica Industriale: Journal of Industrial and Business Economics, Springer;Associazione Amici di Economia e Politica Industriale, vol. 49(3), pages 635-665, September.
    3. Diane Coyle & Leonard Nakamura, 2022. "Time Use, Productivity, and Household-centric Measurement of Welfare in the Digital Economy," International Productivity Monitor, Centre for the Study of Living Standards, vol. 42, pages 165-186, Spring.
    4. Shota Ichihashi & Byung-Cheol Kim, 2023. "Addictive Platforms," Management Science, INFORMS, vol. 69(2), pages 1127-1145, February.
    5. Ryoji Jinushi, 2024. "Costly Advertising and Information Congestion: Insights from Pigou's Successors," Working Papers e210, Tokyo Center for Economic Research.
    6. Peitz, Martin, 2020. "Economic policy for digital attention intermediaries," ZEW Discussion Papers 20-035, ZEW - Leibniz Centre for European Economic Research.
    7. Alagöz, Nazli, 2024. "Promotion and technological change in the music industry," Other publications TiSEM 511ceba0-62a0-4c60-a76c-f, Tilburg University, School of Economics and Management.

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    More about this item

    Keywords

    media economics; advertising clutter; limited attention; information congestion; two-sided markets;
    All these keywords.

    JEL classification:

    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets

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