Can Labeling and Information Policies Harm Consumers?

Jayson Lusk and Stéphan Marette ()

Journal of Agricultural & Food Industrial Organization, 2012, vol. 10, issue 1, 15

Abstract: Information and labeling are popular food policy instruments because of their presumed positive influence on consumer welfare. In a one-good case with unlimited attention, we show consumer welfare is always improved with the provision of accurate information. However, in a two-good case with limited attention, we show that consumer welfare is not always improved with the provision of accurate information. When attention is constrained, welfare may fall with information provision policies irrespective of their costs. The results suggest information and labeling polices may sometimes be counterproductive when attention is limited.

Keywords: attention; consumer welfare; labeling; value of information (search for similar items in EconPapers)
Date: 2012
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Citations: View citations in EconPapers (10)

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DOI: 10.1515/1542-0485.1373

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