 Economic Rents Extracted in the Process of ConsumptionMPRA Paper from University Library of Munich, Germany Abstract: The process of consumption has generally been regarded as a result of economic inequality, not as a source of it. However, in this paper, I show that firms obtain economic rents from consumers in the process of consumption because firms manipulate consumers by placing “lawful” disinformation into their advertisements. I examine the mechanism underlying these economic rents based on models of ranked information and economic rents derived from mistakes in business deals. I show that there is the optimal level of lawful disinformation in advertisements that differs depending on the average consumer’s abilities to discover disinformation. Therefore, it is likely that a huge amount of money is always extracted from households (consumers) in the process of consumption by firms that routinely engage in manipulation via dissemination of legal disinformation, which can lead to high levels of economic inequality. Hence, appropriate government interventions with regard to these economic rents are required. Keywords: Advertising; Consumption; Disinformation; Economic inequality; Economic rents; Ranked information (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:119012 Access Statistics for this paper More papers in MPRA Paper from University Library of Munich, Germany Ludwigstraße 33, D-80539 Munich, Germany. Contact information at EDIRC. |
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