Rhodes, Andrew and Wilson, Chris (2015) False Advertising. TSE Working Paper, n. 15-614, Toulouse

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Abstract

There is widespread evidence that some firms use false advertising to overstate the value of their products. Using a model in which a policymaker is able to punish such false claims, we characterize a natural equilibrium in which false advertising actively influences rational buyers. We analyze the effects of policy under different welfare objectives and establish a set of demand and parameter conditions where policy optimally permits a positive level of false advertising. Further analysis considers some wider issues including the implications for product investment and industry self-regulation.

Item Type: Monograph (Working Paper)
Language: English
Date: December 2015
Place of Publication: Toulouse
Uncontrolled Keywords: Misleading Advertising, Product Quality, Pass-through, Self-Regulation
JEL Classification: D83 - Search; Learning; Information and Knowledge; Communication; Belief
L15 - Information and Product Quality; Standardization and Compatibility
M37 - Advertising
Subjects: B- ECONOMIE ET FINANCE
Divisions: TSE-R (Toulouse)
Institution: Université Toulouse 1 Capitole
Site: UT1
Date Deposited: 18 Apr 2016 11:23
Last Modified: 23 Jul 2018 12:53
OAI Identifier: oai:tse-fr.eu:29998
URI: https://publications.ut-capitole.fr/id/eprint/19204

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