Information disclosure and consumer awareness

Sanxi Li, Martin Peitz and Xiaojian Zhao

Journal of Economic Behavior & Organization, 2016, vol. 128, issue C, 209-230

Abstract: Whether consumers are aware of potentially adverse product effects is key to private and social incentives to disclose information about undesirable product characteristics. In a monopoly model with a mix of aware and unaware consumers, a larger share of unaware consumers makes information disclosure less likely to occur. Since the firm is not interested in releasing information to unaware consumers, a more precise targeting technology that allows the firm to better keep unaware consumers in the dark leads to more disclosure. A regulator may want to intervene in this market and impose mandatory disclosure rules.

Keywords: Information disclosure; Informative advertising; Targeted advertising; Consumer awareness; Behavioral bias; Non-common prior; Consumer protection; Behavioral industrial organization (search for similar items in EconPapers)
JEL-codes: L51 M38 (search for similar items in EconPapers)
Date: 2016
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (16)

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Working Paper: Information Disclosure and Consumer Awareness (2014)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jeborg:v:128:y:2016:i:c:p:209-230

DOI: 10.1016/j.jebo.2016.05.003

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