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On the Strategic Use of Attention Grabbers

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  • Spiegler, Ran
  • Eliaz, Kfir

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.

Suggested Citation

  • Spiegler, Ran & Eliaz, Kfir, 2010. "On the Strategic Use of Attention Grabbers," CEPR Discussion Papers 7863, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:7863
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    1. Nedungadi, Prakash, 1990. "Recall and Consumer Consideration Sets: Influencing Choice without Altering Brand Evaluations," Journal of Consumer Research, Journal of Consumer Research Inc., vol. 17(3), pages 263-276, December.
    2. Kfir Eliaz & Ran Spiegler, 2011. "Consideration Sets and Competitive Marketing," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 78(1), pages 235-262.
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    7. Dekel, Eddie & Lipman, Barton L & Rustichini, Aldo, 2001. "Representing Preferences with a Unique Subjective State Space," Econometrica, Econometric Society, vol. 69(4), pages 891-934, July.
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    More about this item

    Keywords

    Bounded rationality; Consideration sets; Conversion rate; Irrelevant alternatives; Limited attention; Marketing; Media platforms; Persuasion; Preferences over menus;
    All these keywords.

    JEL classification:

    • D03 - Microeconomics - - General - - - Behavioral Microeconomics: Underlying Principles
    • D11 - Microeconomics - - Household Behavior - - - Consumer Economics: Theory
    • D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory

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