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Information Congestion

Author

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  • Simon P. Anderson
  • André de Palma

Abstract

Advertising messages compete for scarce attention. ?Junk? mail, ?spam? e-mail, and telemarketing calls need both parties to exert effort to generate transactions. Message recipients supply attention depending on average message beneÞt. Senders are motivated by proÞts. Costlier message transmission may improve message quality so more messages are examined. Too many messages may be sent, or the wrong ones. A Do-Not-Call policy beats a ban, but too many individuals opt out. A monopoly gatekeeper performs better than personal access pricing if nuisance costs are moderate. The medium is the message with multiple channels, and there is excessive indiscriminate mailing.

Suggested Citation

  • Simon P. Anderson & André de Palma, 2006. "Information Congestion," Virginia Economics Online Papers 364, University of Virginia, Department of Economics.
    • Handle: RePEc:vir:virpap:364
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    File URL: http://repec.as.virginia.edu/RePEc/vir/virpap/papers/virpap364.pdf
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    More about this item

    Keywords

    information overload; congestion; advertising; common property resource; overÞshing; two-sided markets; junk mail; email; telemarketing; Do Not Call List; message pricing; the Medium is the Message; market research.;
    All these keywords.

    JEL classification:

    • D11 - Microeconomics - - Household Behavior - - - Consumer Economics: Theory
    • D60 - Microeconomics - - Welfare Economics - - - General
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets

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