Competitive Attention, Superstars and the Long Tail

University of Zurich, Department of Economics, Working Paper No. 383

70 Pages Posted: 12 Apr 2021

See all articles by Andreas Hefti

Andreas Hefti

University of Zurich - Department of Economics; Zurich University of Applied Sciences

Julia Lareida

University of Zurich - Department of Economics

Date Written: April 2021

Abstract

We propose a model of competitive attention based on two key premises: i) People have limited information processing capacities and ii) consideration sets are formed according to relative salience. The equilibrium predictions we obtain can help to understand, and connect, diverse empirical phenomena, such as the Paradox of Choices, the Power Law dispersions of key market data (sales, profits, online clicks,...), the relation between advertising expenditures and market shares, the evolution of market inequality, or why evidence favoring a “Long Tail” effect is mixed at best.

Keywords: Attention, choice overload, consideration sets, Power Law, Superstar, Long Tail, Matthew Effect

JEL Classification: D91, D40, D43, E71, L11, M37

Suggested Citation

Hefti, Andreas M. and Lareida, Julia, Competitive Attention, Superstars and the Long Tail (April 2021). University of Zurich, Department of Economics, Working Paper No. 383, Available at SSRN: https://ssrn.com/abstract=3823184 or http://dx.doi.org/10.2139/ssrn.3823184

Andreas M. Hefti (Contact Author)

University of Zurich - Department of Economics ( email )

Zürich
Switzerland

Zurich University of Applied Sciences ( email )

Institut fuer Angewandte Medienwissenschaft
Zur Kesselschmiede 35
Winterthur, CH 8401
Switzerland

Julia Lareida

University of Zurich - Department of Economics ( email )

Zürich
Switzerland

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