Abstract
There are many situations in which alternatives ranked by quality wish to be chosen and compete for the imperfect attention of a chooser by selecting their own salience. The chooser may be ‘tricked' into choosing more salient but inferior alternatives. We investigate when competitive forces ensure instead that (strictly) higher salience is diagnostic of (strictly) higher quality and the most frequently chosen alternative is the best one. We prove that the structure of externalities in the technology of salience is key. Broadly speaking, positive externalities in salience favour correlation between quality and salience.
Original language | English |
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Pages (from-to) | 827-844 |
Number of pages | 18 |
Journal | Economic Journal |
Volume | 128 |
Issue number | 609 |
DOIs | |
Publication status | Published - Mar 2018 |
Bibliographical note
Publisher Copyright:© 2016 Royal Economic Society
Copyright:
Copyright 2018 Elsevier B.V., All rights reserved.
Research Groups and Themes
- ECON Microeconomic Theory