On the strategic use of attention grabbers

Abstract

When a firm decides which products to offer or put on display, it takes into ac-count the products' ability to attract attention to the brand name as a whole. Thus, the value of a product to the firm emanates from the consumer demand it directly meets, as well as the indirect demand it generates for the firms' other products. We explore this idea in the context of a stylized model of competition between me-dia content providers (broadcast TV channels, internet portals, newspapers) over consumers with limited attention. We characterize the equilibrium use of prod-ucts as attention grabbers and its implications for consumer conversion, industry profits, and (mostly vertical) product differentiation.