EconPapers    
Economics at your fingertips  
 

False Advertising

Andrew Rhodes () and Chris Wilson

EconStor Preprints from ZBW - Leibniz Information Centre for Economics

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 policymaker is able to 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.

Keywords: Misleading Advertising; Product Quality; Pass-through; Self-Regulation (search for similar items in EconPapers)
JEL-codes: D83 L15 M37 (search for similar items in EconPapers)
Date: 2017
New Economics Papers: this item is included in nep-com, nep-ind, nep-mic and nep-mkt
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
Journal Article: False advertising (2018) Downloads
Working Paper: False advertising (2018) Downloads
Working Paper: False Advertising (2017) Downloads
Working Paper: False Advertising (2017) Downloads
Working Paper: False Advertising (2016) Downloads
Working Paper: False Advertising (2015) Downloads
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:zbw:esprep:128476

Access Statistics for this paper

More papers in EconStor Preprints from ZBW - Leibniz Information Centre for Economics Contact information at EDIRC.
Bibliographic data for series maintained by ZBW - Leibniz Information Centre for Economics ().

 
Page updated 2025-03-20
Handle: RePEc:zbw:esprep:128476