Competing to Persuade a Rationally Inattentive Agent

Firms strategically disclose product information in order to attract consumers, butrecipients often find it costly to process all of it, especially when products have complexfeatures. We study a model of competitive information disclosure by two senders, inwhich the receiver may garble each sender's experiment, subject to a cost increasing inthe informativeness of the garbling. For a large class of parameters, it is an equilibriumfor the senders to provide the receiver's first best level of information–i.e., as much as shewould learn if she herself controlled information provision. We identify a novel channelthrough which competition with attention costs encourages information disclosure:information on one sender substitutes for information on the other, which nullifies theprofitability of a unilateral provision of less information. We apply our results to thedisclosure of drug quality information by pharmaceutical companies to doctors