# Competing to Persuade a Rationally Inattentive Agent

## TL;DR

This paper models how competing firms strategically disclose information to a rationally inattentive consumer, showing that competition can lead to full information disclosure despite attention costs.

## Contribution

It introduces a model of competitive information disclosure with garbling costs, revealing conditions under which firms provide optimal information levels despite consumer attention constraints.

## Key findings

- Firms tend to disclose as much information as the consumer would learn if she controlled it.
- Information from one firm substitutes for the other, reducing incentives to withhold information.
- Competition with attention costs can promote full information disclosure.

## Abstract

Firms strategically disclose product information in order to attract consumers, but recipients often find it costly to process all of it, especially when products have complex features. We study a model of competitive information disclosure by two senders, in which the receiver may garble each sender's experiment, subject to a cost increasing in the informativeness of the garbling. For a large class of parameters, it is an equilibrium for the senders to provide the receiver's first best level of information - i.e. as much as she would learn if she herself controlled information provision. Information on one sender substitutes for information on the other, which nullifies the profitability of a unilateral provision of less information. Thus, we provide a novel channel through which competition with attention costs encourages information disclosure.