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Attention oligopoly

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Title: Attention oligopoly
Authors: Prat, A
Valletti, T
Item 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.
Issue Date: Aug-2022
Date of Acceptance: 7-Jun-2021
URI: http://hdl.handle.net/10044/1/90318
DOI: 10.1257/mic.20200134
ISSN: 1945-7669
Publisher: American Economic Association
Start Page: 530
End Page: 557
Journal / Book Title: American Economic Journal: Microeconomics
Volume: 14
Issue: 3
Keywords: 14 Economics
Publication Status: Published
Online Publication Date: 2022-08
Appears in Collections:Imperial College Business School



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