Attention Scarcity

Eric Goldman

Marquette University Law School

eric.goldman@marquette.edu

http://eric_goldman.tripod.com

Overview

w My initial policy goal: help consumers get wanted/relevant content

w Observation #1: Each marketing medium has idiosyncratic regulations

n The medium determines the message

n Media convergence/innovations

n Evolution of consumer expectations

w Observation #2: Marketing regulations can interfere with the flow of wanted content

w Observation #3: Consumers remain frustrated about unwanted content despite attempts to regulate

n Every new marketing medium will produce a new crisis

w Consumers don’t like unwanted content because it consumes their attention

n Underlies concerns about loss of control, intrusiveness, annoyance, secondary PII uses, etc.

n Contrast response to wanted content

w However, attention consumption is usually ignored or lumped under “privacy” concerns

n Attention scarcity is addressed only indirectly

n Regulatory efforts underperform accordingly

w Focusing on attention consumption yields useful policy insights

Attention Scarcity

w A person “pays attention” when he/she selects a limited number of thoughts/focal points from of a larger set of possible focal targets

n Attention is scarce by definition

w Attention is physiologically constrained

n By our limited ability to multi-task

n By biological processes (infancy, senility, ADD, sleep)

n By lifespan

w We have a limited attention “inventory”

w Attention allocation has an opportunity cost

n Wages

n Marketer payments to consumer

n Alternative ways to spend time

w Attention consumption may impose indirect costs

n Anger/frustration

n Transition times

Market Failure?

w An economist’s argument for regulating the delivery of marketing communications:

n Marketing consumes scarce attention

n Usually marketers do not bear any costs attributable to attention consumption

n Marketing creates negative externalities, so marketers overconsume attention

n We should make marketers internalize attention consumption costs. Options:

w Attention consumption tax

w Private cause of action for attention consumption

w Force communication through attention marketplace

w (Other inhibiting regulations)

w But pro-regulation argument cannot distinguish marketing from other attention consumption communications/activities

w Also assumes that marketing is inherently net negative utility

n But recipients can derive positive net private utility from a marketing message

n Plus, marketing may create positive externalities

w Non-recipients may benefit from more competition

Coase Theorem

w Coase Theorem (first order): an efficient result will occur whether we give an “entitlement to attention” to marketers or consumers

n The parties will bargain to an efficient outcome

n But assumes no transaction costs

w Coase Theorem (second order): the least cost avoider should not get the entitlement

n So who is the least cost avoider?

w Argument that marketers are least cost avoider

n Marketer knows message contents; recipients don’t (?)

n Consumers incur transaction costs to protect their attention (?)

w Argument that consumers are least cost avoider

n Consumers have heterogeneous interests in a marketer’s messages

w Some recipients derive positive net utility; others derive negative net utility

n Consumers know their interests, the value they place on their attention, and their attitudes towards marketing; marketers do not

w These consumer preferences are private information

w This also avoids artificial distinctions between marketing and other attention consumptions

w Counter-argument: preference signaling could lower marketer transaction costs

n Do not contact list

n Opt out

n (Attention marketplace)

w Limits of signaling

n Blunt instrument

n Signaling creates new transaction costs

n Does not resolve non-marketing attention consumption

n Regulatory intervention can lower consumer transaction costs too

Policy Implications

w We should not give consumers an entitlement in their attention

w Instead, we should conceptualize attention conservation as a private benefit that consumers will procure to their marginal value

n Privacy-enhancing technologies

n Subscription content vs. ad-supported content

w We should not regulate marketing media to protect against attention consumption

n Adware regulations

n Spam regulations

w Especially rationales like lost employee productivity

n Telemarketing regulations

w We can help consumers lower transaction costs by facilitating attention conservation efforts

n Encourage/don’t discourage sorting content

w Mandatory labeling

w Previewing content (search results)

n Don’t hinder relevancy targeting

w Utah Spyware Control Act

w Anti-Gmail law

n Be careful mandating attention-consuming disclosures

w Consumers can’t bargain to avoid them

w Examples: GLB and HIPAA privacy notices, SPY Act