Comparative Advantage and Efficient Advertising in the Attention Economy

15 Pages Posted: 31 May 2007

Date Written: January 9, 2007

Abstract

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.

Keywords: attention economy, advertising, comparative advantage

JEL Classification: D50, D80, L10

Suggested Citation

Huberman, Bernardo A. and Wu, Fang, Comparative Advantage and Efficient Advertising in the Attention Economy (January 9, 2007). Available at SSRN: https://ssrn.com/abstract=943763 or http://dx.doi.org/10.2139/ssrn.943763

Bernardo A. Huberman (Contact Author)

CableLabs ( email )

400 W California Ave
Sunnyvale, CA 94086
United States

Fang Wu

HP Labs ( email )

Palo Alto, CA 94304
United States

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