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Advertising for Attention in a Consumer Search Model

Bibliographic Data

ID9703050
AuthorsMarco A Haan (University of Groningen), Marco Haan (0000-0003-2295-1854, University of Groningen), José L Moraga‐González (0000-0002-1669-8402, ICREA, IESE Business School and University of Groningen)
Year2011
Volume121
Issue552
Pages552-579
Publication date2011-05-01
Peer ReviewedYes
Open AccessYes
TypeARTICLE
VenueThe Economic Journal (JOURNAL)
Journal identifiersISSN: 0013-0133 • E-ISSN: 1468-0297
PublisherOxford University Press (OUP) (PUBLISHER)
DOI10.1111/j.1468-0297.2011.02423.x
OpenAlexW2111132160
LanguageEN
Citations received12
References cited37

We model the idea that when consumers search for products, they first visit the firm whose advertising is most salient. The gains a firm derives from being visited early increase in search costs, so equilibrium advertising increases as search costs rise. As a result, higher search costs may decrease both consumer welfare and firm profits. We extend the basic model by allowing for firm heterogeneity in advertising costs. Firms that raise attention more easily advertise more but also charge lower prices and obtain higher profits. As advertising cost asymmetries increase, consumer surplus falls and aggregate profits rise

Advertising · Business · Economics · Consumer Market Behavior and Pricing · Digital Platforms and Economics · Merger and Competition Analysis

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Unique citing works12
Citations per year0,8
Citation span2011 - 2026 (16)
Citation velocitycurrent
Highly citedNo
Citation typesNeutral: 11

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