Résumé
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.
Mots-clés
Misleading Advertising; Product Quality; Pass-through; Self-Regulation;
Codes JEL
- D83: Search • Learning • Information and Knowledge • Communication • Belief
- L15: Information and Product Quality • Standardization and Compatibility
- M37: Advertising
Remplace
Andrew Rhodes et Chris Wilson, « False Advertising », TSE Working Paper, n° 15-614, décembre 2015, révision octobre 2017.
Référence
Andrew Rhodes et Chris Wilson, « False Advertising », The RAND Journal of Economics, vol. 49, n° 2, Summer 2018, p. 348–369.
Voir aussi
Publié dans
The RAND Journal of Economics, vol. 49, n° 2, Summer 2018, p. 348–369