Injunctions against false advertising

Florian Baumann and Alexander Rasch

VfS Annual Conference 2017 (Vienna): Alternative Structures for Money and Banking from Verein für Socialpolitik / German Economic Association

Abstract: We consider a situation of duopolistic competition in which one firm may (falsely) advertise high product quality. Consumers are heterogeneous. One group forms rational beliefs about quality, whereas some consumers are naive and fully trust any advertisement. We compare two scenarios in which either the competitor or a government agency can file an injunction suit. From a welfare perspective, we show that it may be optimal either to have the competitor or the government agency as plaintiff.

JEL-codes: K41 K42 L13 L15 (search for similar items in EconPapers)
Date: 2017
New Economics Papers: this item is included in nep-com, nep-law, nep-mic and nep-mkt
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Related works:
Working Paper: Injunctions against false advertising (2019)
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:vfsc17:168142

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