Brown Bag seminar in Economics | Johan Orrenius
Welcome to the Brown Bag Seminar in Economics organized by the Department of Economics, SSE. The seminar speaker is Johan Orrenius, SSE who will present "What is the value of attention? Supply and demand estimation of attention in a mobile app setting"
Abstract
I study the digital market for attention in a freemium mobile game where users choose between paying with money or by watching 30-second video ads. Using unique event-level data, I estimate consumer's supply elasticity of attention. In the aggregate, a one percent higher price increases the share of payments by users watching videos by 2.2 percent. A substantial part is due to individual heterogeneity in tastes. When accounting for individual
heterogeneity, the elasticity reduces to 0.5. The individual elasticities vary throughout the day, peaking in the evening. Complementing the unique data on each play made by users, I use data on the revenue to the gaming company from showing ads. The data is on an individual and daily level allowing me to match the individual supply elasticity with the
revenue from showing ads to the same individual. I find advertisers pay more to show ads to individuals who are less likely to use ads as their payment method. The effect is stronger among Android users than iOS users. Finally, I estimate the willingness to pay to avoid a
30-second ad to 0.15 euros. By considering the time component of the ad, we get a value of time of 18 euros per hour. This is of similar magnitude to previous estimates of consumers' valuation of time.
Johan Orrenius is a Ph.D. student at SSE, in the Department of Economics.
This seminar takes place at Stockholm School of Economics, Sveavägen 65, in room A750.
Please contact kathrine.abelson@hhs.se if you have any questions.