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Competition With Limited Attention to Quality Differences.

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Title: Competition With Limited Attention to Quality Differences.
Authors: Schmitt, Stefanie Y.1 (AUTHOR) stefanie.schmitt@uni-bamberg.de
Source: Journal of Industrial Economics. Dec2025, Vol. 73 Issue 4, p620-636. 17p.
Subjects: Threshold (Perception), Product differentiation, Selectivity (Psychology), Competition (Psychology), Customer satisfaction
Abstract: I analyze the implication of consumers' limited attention to quality differences on market outcomes and welfare. I model this limited attention with a perception threshold, that is, consumers only perceive quality differences between goods that exceed their perception threshold. The model allows for equilibria with distinguishable and with indistinguishable qualities. If firms are sufficiently horizontally differentiated, firms produce goods with indistinguishable qualities. Then, limited attention harms consumers and benefits firms. If firms are not sufficiently horizontally differentiated, firms produce goods with distinguishable qualities. Then, limited attention has no effect on consumers' welfare or firms' profits. [ABSTRACT FROM AUTHOR]
Copyright of Journal of Industrial Economics is the property of Wiley-Blackwell and its content may not be copied or emailed to multiple sites without the copyright holder's express written permission. Additionally, content may not be used with any artificial intelligence tools or machine learning technologies. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)
Database: Engineering Source
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PubType: Academic Journal
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  Data: Competition With Limited Attention to Quality Differences.
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  Data: <searchLink fieldCode="DE" term="%22Threshold+%28Perception%29%22">Threshold (Perception)</searchLink><br /><searchLink fieldCode="DE" term="%22Product+differentiation%22">Product differentiation</searchLink><br /><searchLink fieldCode="DE" term="%22Selectivity+%28Psychology%29%22">Selectivity (Psychology)</searchLink><br /><searchLink fieldCode="DE" term="%22Competition+%28Psychology%29%22">Competition (Psychology)</searchLink><br /><searchLink fieldCode="DE" term="%22Customer+satisfaction%22">Customer satisfaction</searchLink>
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  Data: I analyze the implication of consumers' limited attention to quality differences on market outcomes and welfare. I model this limited attention with a perception threshold, that is, consumers only perceive quality differences between goods that exceed their perception threshold. The model allows for equilibria with distinguishable and with indistinguishable qualities. If firms are sufficiently horizontally differentiated, firms produce goods with indistinguishable qualities. Then, limited attention harms consumers and benefits firms. If firms are not sufficiently horizontally differentiated, firms produce goods with distinguishable qualities. Then, limited attention has no effect on consumers' welfare or firms' profits. [ABSTRACT FROM AUTHOR]
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  Data: <i>Copyright of Journal of Industrial Economics is the property of Wiley-Blackwell and its content may not be copied or emailed to multiple sites without the copyright holder's express written permission. Additionally, content may not be used with any artificial intelligence tools or machine learning technologies. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract.</i> (Copyright applies to all Abstracts.)
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    Identifiers:
      – Type: doi
        Value: 10.1111/joie.70007
    Languages:
      – Code: eng
        Text: English
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        PageCount: 17
        StartPage: 620
    Subjects:
      – SubjectFull: Threshold (Perception)
        Type: general
      – SubjectFull: Product differentiation
        Type: general
      – SubjectFull: Selectivity (Psychology)
        Type: general
      – SubjectFull: Competition (Psychology)
        Type: general
      – SubjectFull: Customer satisfaction
        Type: general
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      – TitleFull: Competition With Limited Attention to Quality Differences.
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            NameFull: Schmitt, Stefanie Y.
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            – D: 01
              M: 12
              Text: Dec2025
              Type: published
              Y: 2025
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