Coordination Motives and Competition for Attention in Information Markets*

We examine markets for information where consumers want to coordinate their decisions and producers compete for consumers’ attention. We describe information sources in terms of their quantity, accuracy, and clarity. We find that competition for attention leads to homogeneity of information sources, even when consumers would want to pay attention to heterogeneous sources. Clarity plays a prominent role, as it drives the comparative advantage of an information source as a coordination device for consumers. We also show that, by becoming the “currency” whereby consumers pay for information, attention causes information markets to work inefficiently.