Injunctions against false advertising

Arbeitspapier

Rules of consumer protection or fair competition can be publicly or privately enforced. We consider the possibility of false advertising by a firm in duopolistic competition where consumers can be distinguished according to whether or not they form rational beliefs about the trustworthiness of advertising claims. We compare private and public law enforcement in the form of the demand for injunctions against false advertising. From a welfare perspective, we show that it can be optimal either to have the private entity (the competitor/a consumer protection agency) or the government agency as plaintiff, where the optimal regime depends on the share of näive consumers and the level of trial costs in a non-trivial way.

Object Details

• ISBN: 978-3-86304-599-9
• Language: Englisch

References and Relationships

• Bibliographic citation: Series: DICE Discussion Paper ; No. 314

Classification and Topics

• Classification: Wirtschaft ; Litigation Process ; Illegal Behavior and the Enforcement of Law ; Oligopoly and Other Imperfect Markets ; Information and Product Quality; Standardization and Compatibility
• Subject: injunction suits ; false advertising ; law enforcement ; naïve consumer ; product differentiation

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Baumann, Florian ; Rasch, Alexander
• Event: Veröffentlichung
• (who): Heinrich Heine University Düsseldorf, Düsseldorf Institute for Competition Economics (DICE)
• (where): Düsseldorf
• (when): 2019

Further information

• Handle: http://hdl.handle.net/10419/215747
• Last update: 10.03.2025, 11:43 AM CET