Suchergebnisse

Popular accounts suggest that advertising revenue per unit of consumer attention is lower online than offline, and has fallen in traditional media as the Internet has made advertising markets more competitive. I assess these claims theoretically and empirically, and compare the patterns we observe for the Internet to trends in advertising around the introduction of television and radio. The evidence suggests that the price of attention for similar consumers is actually higher online than offline, and that the growth of new media is not robustly associated with a declining price of attention.

Many important economic questions hinge on the extent to which new goods either crowd out or complement consumption of existing products. Recent methods for studying new goods rule out complementarity by assumption, so their applicability to these questions has been limited. I develop a new model that relaxes this restriction, and use it to study competition between print and online newspapers. Using new micro data from Washington, DC, I estimate the relationship between the print and online papers in demand, the welfare impact of the online paper's introduction, and the expected impact of charging positive online prices. (JEL C25, L11, L82)

Rothschild and Stiglitz (1970) represent random variables as convex functions (integrals of the cumulative distribution function). Combining this representation with Blackwell's Theorem (1953), we characterize distributions of posterior means that can be induced by a signal. This characterization provides a novel way to analyze a class of Bayesian persuasion problems.

We study the design of informational environments in settings where generating information is costly. We assume that the cost of a signal is proportional to the expected reduction in uncertainty. We show that Kamenica & Gentzkow's (2011) concavification approach to characterizing optimal signals extends to these settings.

When is it possible for one person to persuade another to change her action? We consider a symmetric information model where a sender chooses a signal to reveal to a receiver, who then takes a noncontractible action that affects the welfare of both players. We derive necessary and sufficient conditions for the existence of a signal that strictly benefits the sender. We characterize sender-optimal signals. We examine comparative statics with respect to the alignment of the sender's and the receiver's preferences. Finally, we apply our results to persuasion by litigators, lobbyists, and salespeople. (JEL D72, D82, D83, K40, M31)