Kareen Rozen

Associate Professor of Economics
Kareen Rozen
Associate Professor of Economics
Photo: Mike Cohea/Brown University
Competing for consumers’ attention seems an intuitively obvious strategy in a crowded marketplace. But there is some counter-intuitive evidence, economist Kareen Rozen has found, that competing for consumer inattention may be an effective approach.

Kareen Rozen didn’t always have plans to become a microeconomic theorist. She had visions of studying neuroscience and eventually becoming a doctor when she entered Columbia University. But beyond organic chemistry, Rozen also found herself signing up for classes in mathematics and statistics. Recognizing her interest in numbers, a professor directed her to the economics department, where Rozen realized she had found a new career path. She went on to receive her Ph.D. in economics from Princeton.

Rozen says it was the practicality of microeconomics that drew her in and continues to hold her interest.

Behavioral economics and bounded rationality are the specific areas that Rozen researches. “It’s very realistic. It describes how people function, and I think it’s important to understand the implications for the economy in that setting,” she says.

As she explains, her work centers on trying “to understand how we can model the world when our processing ability is limited.”

It’s a guiding principle that Rozen put into play in one of her most recent papers, “Competing for Consumer Inattention,” co-authored with Geoffroy de Clippel, associate professor of economics at Brown, and former Brown professor Kfir Eliaz. The paper was published in December 2014 as the lead article in the Journal of Political Economy. The three looked at the process consumers undertake to choose each of their goods or services among multiple competitors. Most consumers don’t have the time or resources to search for the best deal for every product they purchase and have to decide for which markets to direct their efforts. While it may seem that inattentive consumers will overpay, Rozen and her co-authors find that, because it’s not in a firm’s best interest to have pricing that calls a consumer’s attention to its market, prices may actually be lower when firms have to compete for consumers’ inattention.

“The policy recommendation would be that it actually may not help to intervene and give people a way to process more information. It’s possible that when consumers don’t have enough attention to allocate to researching every market, it makes firms work harder to not get your attention by keeping their prices low, but in line with other market leaders.”

Rozen is currently doing some experimental work on strategic obfuscation. Her aim is to better understand the incentives that can cause sellers to be less than clear about the asset they are trying to sell to a potential customer.

“I’m interested in understanding whether people will try to obfuscate intentionally, how the receiver of that message will respond, whether will they exert extra attention to try to understand that message, and what the implications of their actions might be.”

Rozen said she looks forward to more of this type of collaboration with her new economics colleagues when she begins her appointment as associate professor of economics in the fall. She already knows many of them, having taught at Brown as a visiting professor during a sabbatical from Yale during the 2013-14 academic year, where she’s taught in the economics department since 2007.

“I’m very happy to be coming in. The economic theory colleagues at Brown are very strong as are the rest of the economists here. Many of the ideas you get come from talking with non-theorists, so it will be great to interact with everybody.”