Competition for Attention. / da Costa Santos Bordalo, Pedro; Gennaioli, Nicola; Shleifer, Andrei.

In: Review of Economic Studies, Vol. 83, No. 2, 01.04.2016, p. 481-513.

Research output: Contribution to journalArticlepeer-review

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Competition for Attention. / da Costa Santos Bordalo, Pedro; Gennaioli, Nicola; Shleifer, Andrei.

In: Review of Economic Studies, Vol. 83, No. 2, 01.04.2016, p. 481-513.

Research output: Contribution to journalArticlepeer-review

Harvard

da Costa Santos Bordalo, P, Gennaioli, N & Shleifer, A 2016, 'Competition for Attention', Review of Economic Studies, vol. 83, no. 2, pp. 481-513. https://doi.org/10.1093/restud/rdv048

APA

da Costa Santos Bordalo, P., Gennaioli, N., & Shleifer, A. (2016). Competition for Attention. Review of Economic Studies, 83(2), 481-513. https://doi.org/10.1093/restud/rdv048

Vancouver

da Costa Santos Bordalo P, Gennaioli N, Shleifer A. Competition for Attention. Review of Economic Studies. 2016 Apr 1;83(2):481-513. https://doi.org/10.1093/restud/rdv048

Author

da Costa Santos Bordalo, Pedro ; Gennaioli, Nicola ; Shleifer, Andrei. / Competition for Attention. In: Review of Economic Studies. 2016 ; Vol. 83, No. 2. pp. 481-513.

BibTeX

@article{32797a03b19d4f6f877772b54c7b92f0,
title = "Competition for Attention",
abstract = "We present a model of market competition in which consumers' attention is drawn to the products' most salient attributes. Firms compete for consumer attention via their choices of quality and price. Strategic positioning of a product affects how all other products are perceived. With this attention externality, depending on the cost of producing quality some markets exhibit {"}commoditized{"} price salient equilibria, while others exhibit {"}de-commoditized{"} quality salient equilibria. When the costs of quality change, innovation can lead to radical shifts in markets, as in the case of decommoditization of the coffee market by Starbucks. In the context of financial innovation, the model generates the phenomenon of {"}reaching for yield{"}.",
author = "{da Costa Santos Bordalo}, Pedro and Nicola Gennaioli and Andrei Shleifer",
year = "2016",
month = apr,
day = "1",
doi = "10.1093/restud/rdv048",
language = "English",
volume = "83",
pages = "481--513",
journal = "Review of Economic Studies",
issn = "0034-6527",
publisher = "Oxford University Press",
number = "2",

}

RIS

TY - JOUR

T1 - Competition for Attention

AU - da Costa Santos Bordalo, Pedro

AU - Gennaioli, Nicola

AU - Shleifer, Andrei

PY - 2016/4/1

Y1 - 2016/4/1

N2 - We present a model of market competition in which consumers' attention is drawn to the products' most salient attributes. Firms compete for consumer attention via their choices of quality and price. Strategic positioning of a product affects how all other products are perceived. With this attention externality, depending on the cost of producing quality some markets exhibit "commoditized" price salient equilibria, while others exhibit "de-commoditized" quality salient equilibria. When the costs of quality change, innovation can lead to radical shifts in markets, as in the case of decommoditization of the coffee market by Starbucks. In the context of financial innovation, the model generates the phenomenon of "reaching for yield".

AB - We present a model of market competition in which consumers' attention is drawn to the products' most salient attributes. Firms compete for consumer attention via their choices of quality and price. Strategic positioning of a product affects how all other products are perceived. With this attention externality, depending on the cost of producing quality some markets exhibit "commoditized" price salient equilibria, while others exhibit "de-commoditized" quality salient equilibria. When the costs of quality change, innovation can lead to radical shifts in markets, as in the case of decommoditization of the coffee market by Starbucks. In the context of financial innovation, the model generates the phenomenon of "reaching for yield".

U2 - 10.1093/restud/rdv048

DO - 10.1093/restud/rdv048

M3 - Article

VL - 83

SP - 481

EP - 513

JO - Review of Economic Studies

JF - Review of Economic Studies

SN - 0034-6527

IS - 2

ER -