Attention Scarcity - Eric Goldman

Eric Goldman
Marquette University Law School
eric.goldman@marquette.edu
http://eric_goldman.tripod.com

Overview

My initial policy goal: help consumers get wanted/relevant content
Observation #1: Each marketing medium has idiosyncratic regulations
- The medium determines the message
- Media convergence/innovations
- Evolution of consumer expectations
Observation #2: Marketing regulations can interfere with the flow of wanted content
Observation #3: Consumers remain frustrated about unwanted content despite attempts to regulate
- Every new marketing medium will produce a new crisis
Consumers don’t like unwanted content because it consumes their attention
- Underlies concerns about loss of control, intrusiveness, annoyance, secondary PII uses, etc.
- Contrast response to wanted content
However, attention consumption is usually ignored or lumped under “privacy” concerns
- Attention scarcity is addressed only indirectly
- Regulatory efforts underperform accordingly
Focusing on attention consumption yields useful policy insights

Attention Scarcity

A person “pays attention” when he/she selects a limited number of thoughts/focal points from of a larger set of possible focal targets
- Attention is scarce by definition
Attention is physiologically constrained
- By our limited ability to multi-task
- By biological processes (infancy, senility, ADD, sleep)
- By lifespan
We have a limited attention “inventory”
Attention allocation has an opportunity cost
- Wages
- Marketer payments to consumer
- Alternative ways to spend time
Attention consumption may impose indirect costs
- Anger/frustration
- Transition times

Market Failure?

An economist’s argument for regulating the delivery of marketing communications:
- Marketing consumes scarce attention
- Usually marketers do not bear any costs attributable to attention consumption
- Marketing creates negative externalities, so marketers overconsume attention
- We should make marketers internalize attention consumption costs. Options:
  - Attention consumption tax
  - Private cause of action for attention consumption
  - Force communication through attention marketplace
  - (Other inhibiting regulations)
But pro-regulation argument cannot distinguish marketing from other attention consumption communications/activities
Also assumes that marketing is inherently net negative utility
- But recipients can derive positive net private utility from a marketing message
- Plus, marketing may create positive externalities
Non-recipients may benefit from more competition

Coase Theorem

Coase Theorem (first order): an efficient result will occur whether we give an “entitlement to attention” to marketers or consumers
- The parties will bargain to an efficient outcome
- But assumes no transaction costs
Coase Theorem (second order): the least cost avoider should not get the entitlement
- So who is the least cost avoider?
Argument that marketers are least cost avoider
- Marketer knows message contents; recipients don’t (?)
- Consumers incur transaction costs to protect their attention (?)
Argument that consumers are least cost avoider
- Consumers have heterogeneous interests in a marketer’s messages
  - Some recipients derive positive net utility; others derive negative net utility
- Consumers know their interests, the value they place on their attention, and their attitudes towards marketing; marketers do not
  - These consumer preferences are private information
This also avoids artificial distinctions between marketing and other attention consumptions
Counter-argument: preference signaling could lower marketer transaction costs
- Do not contact list
- Opt out
- (Attention marketplace)
Limits of signaling
- Blunt instrument
- Signaling creates new transaction costs
- Does not resolve non-marketing attention consumption
- Regulatory intervention can lower consumer transaction costs too

Policy Implications