Vague lies and lax standards of proof: On the law and economics of advice

Mikhail Drugov and Marta Troya-Martinez ()
Additional contact information
Marta Troya-Martinez: New Economic School and CEPR

No w0246, Working Papers from New Economic School (NES)

Abstract: This paper analyses a persuasion game where a seller provides (un)biased and (im)precise advice and may be fined by an authority for misleading the buyers. In the equilibrium, biasing the advice and making it noisier are complements. The advice becomes both more biased and less precise with a stricter standard of proof employed by the authority, a larger share of credulous consumers, and a higher buyers' heterogeneity. The optimal policy of the authority is characterized in terms of a standard of proof and resources devoted to the investigation.

Keywords: Advice; Persuasion; Legal Procedure; Consumer Protection (search for similar items in EconPapers)
JEL-codes: D18 D8 K4 L1 (search for similar items in EconPapers)
Pages: 32 pages
Date: 2018-06
New Economics Papers: this item is included in nep-gth, nep-law and nep-mic
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)

Downloads: (external link)
https://www.nes.ru/files/Preprints-resh/WP246.pdf (application/pdf)

Related works:
Journal Article: Vague lies and lax standards of proof: On the law and economics of advice (2019)
Working Paper: Vague lies and lax standards of proof: On the law and economics of advice (2018)
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Persistent link: https://EconPapers.repec.org/RePEc:abo:neswpt:w0246

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