Attention Manipulation and Information Overload

50 Pages Posted: 8 Jul 2012 Last revised: 7 Oct 2017

See all articles by Petra Persson

Petra Persson

Stanford University; Research Institute of Industrial Economics (IFN)

Multiple version iconThere are 3 versions of this paper

Date Written: September 1, 2017

Abstract

Limits on consumer attention give firms incentives to manipulate prospective buyers’ allocation of attention. This paper models such attention manipulation and shows that it limits the ability of disclosure regulation to improve consumer welfare. Competitive information supply, from firms competing for attention, can reduce consumers’ knowledge by causing information overload. A single firm subjected to a disclosure mandate may deliberately induce such information overload to obfuscate financially relevant information, or engage in product complexification to bound consumers’ financial literacy. Thus, disclosure rules that would improve welfare for agents without attention limitations can prove ineffective for consumers with limited attention. Obfuscation suggests a role for rules that mandate not only the content but also the format of disclosure; however, even rules that mandate “easy-to-understand” formats can be ineffective against complexification, which may call for regulation of product design.

Keywords: Information Overload, Complexity, Persuasion, Disclosure regulation, Consumer Protection, Salience

JEL Classification: D11, D14, D18, D83

Suggested Citation

Persson, Petra, Attention Manipulation and Information Overload (September 1, 2017). IFN Working Paper No. 995. Available at SSRN: https://ssrn.com/abstract=2102155 or http://dx.doi.org/10.2139/ssrn.2102155

Petra Persson (Contact Author)

Stanford University ( email )

Stanford, CA 94305
United States

Research Institute of Industrial Economics (IFN) ( email )

Box 55665
Grevgatan 34, 2nd floor
Stockholm, SE-102 15
Sweden

Register to save articles to
your library

Register

Paper statistics

Downloads
435
Abstract Views
2,538
rank
64,584
PlumX Metrics