Worried about Adverse Product Effects? Information Disclosure and Consumer Awareness

Li, Sanxi, Peitz, Martin and Zhao, Xiaojian (2010) Worried about Adverse Product Effects? Information Disclosure and Consumer Awareness. TSE Working Paper, n. 10-157

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Official URL: http://tse-fr.eu/pub/22665

Abstract

Whether consumers are aware of potentially adverse product effects,
is key for private and social incentives to disclose information.
To obtain a better understanding of this issue we propose a simple
monopoly model that highlights the conceptual difference between
consumer unawareness and consumer uncertainty. We show that total
surplus may be larger in an environment in which consumers are unaware of the potentially adverse effect. We also show that disclosing information whether a particular ingredient is harmful or not increases consumer surplus, but mandatory disclosure of the level of this ingredient may make consumers worse off.

Item Type: Monograph (Working Paper)
Language: English
Date: 12 May 2010
Uncontrolled Keywords: Information disclosure, informative advertising, consumer awareness
JEL codes: D8 - Information, Knowledge, and Uncertainty
L5 - Regulation and Industrial Policy
M3 - Marketing and Advertising
Subjects: B- ECONOMIE ET FINANCE
Divisions: TSE-R (Toulouse)
Site: UT1
Date Deposited: 09 Jul 2014 17:11
Last Modified: 07 Mar 2018 13:22
OAI ID: oai:tse-fr.eu:22665
URI: http://publications.ut-capitole.fr/id/eprint/15036

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