Huberman, Bernardo and Wu, Fang (2006): Comparative Advante and Efficient Advertising in the Attention Economy.
Download (140kB) | Preview
We analyze the problem that enterprises face when having to decide on the most effective way to advertise several items belonging to their inventories within the company’s webpages. We show that the ability to arbitrarily partition a website among items leads to a comparative advantage among webpages which can be exploited so as to maximize the total utility of the enterprise. This result, which also applies to the case of several competitive providers, is then extended to dynamical scenarios where both the advertising allocation and the exposure levels vary with time.
|Item Type:||MPRA Paper|
|Institution:||Information Dynamics Laboratory, HP Labs|
|Original Title:||Comparative Advante and Efficient Advertising in the Attention Economy|
|Keywords:||attention economy; comparative advantage; advertising|
|Subjects:||M - Business Administration and Business Economics ; Marketing ; Accounting ; Personnel Economics > M3 - Marketing and Advertising
M - Business Administration and Business Economics ; Marketing ; Accounting ; Personnel Economics > M3 - Marketing and Advertising > M37 - Advertising
|Depositing User:||Bernardo Huberman|
|Date Deposited:||26. Nov 2006|
|Last Modified:||23. Feb 2013 06:50|
 R. Dorfman, P. A. Samuelson, and R. M. Solow. Linear programming and economic analysis. New York: McGraw-Hill (1958)  R. Dornbusch, S. Fischer, and P. A. Samuelson. Comparative advantage, trade, and payments in a Ricardian model with a continuum of goods. American Economic Review, Vol. 67(5), pp. 823–39 (1977)  M. Esteban-Bravo, J. M. Mugica and J. M. Vidal-Sanz. Marketing Letters, Vol. 16, pp. 99–114 (2005)  J. Falkinger. Limited attention as the scarce resource in an information-rich economy. Discussion Paper IZA, 1538 (2005)  J. Falkinger. Attention economies. Forthcoming in Journal of Economic Theory (2006)  G. Feichtinger, R. F. Hartl, and S. P. Sethi. Dynamic optimal control mod- els in advertising: recent developments. Management Science, Vol. 40, No. 2 (1994)  G. Franck. The economy of attention. Telepolis, July 12 (1999)  X. Gabaix, D. Laibson, G. Moloche. The allocation of attention: theory and evidence. Working paper 03–31, Department of Economics, MIT (2003)  D. Gensch. Advertising planning: mathematical models in advertising me- dia planning. Elsevier (1973)  M. H. Goldhaber. The attention economy and the net. First Monday, 2 (1997)  B. A. Huberman and F. Wu. The economics of attention: maximizing user value in information rich environments. http://www.hpl.hp.com/ research/idl/papers/attention/attention.pdf (2006)  D. Kahneman. Attention and Effort. Prentice Hall (1973)  A. Klamer and H. P. Van Dalen. Attention and the art of scientific pub- lishing. Journal of Economic Methodology, 9, 289–315 (2002)  R. A. Lanham. The economics of attention: style and substance in the age of information. University of Chicago Press (2006)  D. M. Levy. The market for fame and fortune. History of Political Economy, 33, 615–625 (1988)  G. L. Lilien, P. Kotler and K. S. Moorthy. Marketing models. Prentice Hall: New Jersey (1992) 13  J. D. C. Little and L. M. Lodish. A media planning calculus. Operations Research, Vol. 17, pp. 1–35 (1969)  S. Rosen. Substitution and division of labour. Economica, Vol. 45, No. 179, pp. 235–250 (1978)  R. T. Rust. Advertising media models: a practical guide. Lexington Books (1986)  M. Sattinger. Comparative advantage in individuals. Review of Economics and Statistics, Vol. 60, No. 2, pp. 259–267 (1978)  S. P. Sethi. Dynamic optimal control models in advertising: a survey. SIAM Review, Vol. 19, No. 4, pp. 685–725 (1977)  S. Shomstein and M. Behrmann. Cortical systems mediating visual at- tention to both objects and spatial locations. Proceedings of the National Academy of Sciences, USA, Vol. 103, 11387–11392 (2006)  H. A. Simon. Designing organizations for an information rich world. Computers, communications and the public interest. M. Greenberger, ed., 38–52 (1971)  V. Srinivasan. Decomposition of a multi-period media scheduling model in terms of single period equivalents. Management Science, Vol. 23, No. 4 (1976)