Seminar

Attention Oligopoly

Andrea Prat (Columbia University)

May 28, 2018, 14:00–15:30

Room MF 323

Industrial Organization seminar

Abstract

This paper models social media platforms that have proprietary information about their users and sell targeted ad space to producers. Producers, who can be incumbents or entrants, compete for the attention of final consumers. The paper characterizes equilibrium producer entry and consumer welfare in terms of ownership and consumption patterns in the social media industry. The welfare effect of a platform merger is expressed in terms of observable usage. We illustrate the findings with usage data from Facebook, Instagram, and Twitter.