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A randomized experiment with almost 35 million Pandora listeners enables us to measure the sensitivity of consumers to … advertising, an important topic of study in the era of ad-supported digital content provision. The experiment randomized listeners …-load sensitivity as we would have obtained if we had run a month-long experiment. We estimate a demand curve that is strikingly linear …
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We introduce a simple method of recovering attention costs from choice data. Our method rests on a precise analogy with production theory. Costs of attention determine consumer demand and consumer welfare just as a competitive firm's technology determines its supply curve and profits. We...
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