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Rhodes, Andrew
and Wilson, Chris
(2018)
False advertising.
The RAND Journal of Economics, vol. 49 (n° 2).
pp. 348-369.
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Abstract
There is widespread evidence that some firms use false advertising to overstate the value of their products. We consider a model in which a policy maker can punish such false claims. We characterize an equilibrium where false advertising actively influences rational buyers and analyze the effects of policy under different welfare objectives. We establish precise conditions where policy optimally permits a positive level of false advertising and show how these conditions vary intuitively with demand and market parameters. We also consider the implications for product investment and industry self-regulation and connect our results to the literature on demand curvature.
| Item Type: | Article |
|---|---|
| Language: | English |
| Date: | 2018 |
| Refereed: | Yes |
| Place of Publication: | Mount Morris, Ill. |
| 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) |
| Site: | UT1 |
| Date Deposited: | 08 Jun 2018 08:00 |
| Last Modified: | 17 Jun 2021 14:13 |
| OAI Identifier: | oai:tse-fr.eu:32714 |
| URI: | https://publications.ut-capitole.fr/id/eprint/26079 |
Available Versions of this Item
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False Advertising. (deposited 18 Apr 2016 11:23)
- False advertising. (deposited 08 Jun 2018 08:00) [Currently Displayed]
