False Advertising

Andrew Rhodes () and Chris Wilson
Additional contact information
Chris Wilson: School of Business and Economics, Loughborough University

No 2015-13v3, Working Paper series, University of East Anglia, Centre for Competition Policy (CCP) from Centre for Competition Policy, University of East Anglia, Norwich, UK.

Abstract: There is widespread evidence that some firms use false advertising to overstate the value of their products. Using a model in which a policymaker is able to punish such false claims, we characterize a natural equilibrium in which false advertising actively influences rational buyers. We analyze the effects of policy under different welfare objectives and establish a set of demand and parameter conditions where policy optimally permits a positive level of false advertising. Further analysis considers some wider issues including the implications for product investment and industry selfregulation.

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: 2017-10-01
References: View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Related works:
Journal Article: False advertising (2018)
Working Paper: False advertising (2018)
Working Paper: False Advertising (2017)
Working Paper: False Advertising (2017)
Working Paper: False Advertising (2016)
Working Paper: False Advertising (2015)
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Persistent link: https://EconPapers.repec.org/RePEc:uea:ueaccp:2015_13v3

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