Attention oligopoly
File(s)
Author(s)
Prat, Andrea
Valletti, Tommaso
Type
Journal Article
Abstract
We model digital platforms as attention brokers that have proprietary information about their users' product preference and sell targeted ad space to retail product industries. Retail producers - incumbents or entrants -compete for access to this attention bottleneck. We discuss when increased concentration among attention brokers results in a tightening of the attention bottleneck, leading to higher ad prices, fewer ads being sold to entrants, and lower consumer welfare in the product industries. The welfare effect is characterized in terms of patterns of individual usage across platforms. A merger assessment that relies on aggregate platform usage alone can be highly biased.
Date Issued
2022-08
Date Acceptance
2021-06-07
Citation
American Economic Journal: Microeconomics, 2022, 14 (3), pp.530-557
ISSN
1945-7669
Publisher
American Economic Association
Start Page
530
End Page
557
Journal / Book Title
American Economic Journal: Microeconomics
Volume
14
Issue
3
Identifier
https://www.aeaweb.org/articles?id=10.1257/mic.20200134
Subjects
14 Economics
Publication Status
Published
Date Publish Online
2022-08