Abstract
In recent years markets for attention have become a larger and more important part of the economy. The most prominent example is social media. But the market for attention includes mainstream media, advertising, and even university admissions committees. Attention, unlike regular goods, can also be “grabbed” by firms. We analyze a model of the attention economy where there are two types of goods: one which has a potentially higher payoff than the other but requires sustained attention. We begin our analysis with the choice of a single consumer, and then consider competition between firms. We show that “shallow” goods can crowd out “deep” goods and that in market equilibrium shallow goods can come to dominate. An implication is that increased competition in attention markets can be welfare decreasing.
We analyze a model of the attention economy where there are two types of goods: one which has a potentially higher payoff than the other but requires sustained attention.