Arbeitspapier
How Limiting Deceptive Practices Harms Consumers
There are two competing sellers of an experience good, one offers high quality, one low. The low-quality seller can engage in deceptive advertising, potentially fooling a buyer into thinking the product is better than it is. Although deceptive advertising might seem to harm the buyer, we show that he could be better off when the low-quality seller can engage in deceptive advertising than not. We characterize the optimal deterrence rule that a regulatory agency seeking to punish deceptive practices should adopt. We show that greater protection against deceptive practices does not necessarily improve the buyer-welfare.
- Language
-
Englisch
- Bibliographic citation
-
Series: Working Paper ; No. 23
- Classification
-
Wirtschaft
Oligopoly and Other Imperfect Markets
Information and Product Quality; Standardization and Compatibility
- Subject
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Misleading Advertising
Deception
Bayesian Consumers
Asymmetric Information
- Event
-
Geistige Schöpfung
- (who)
-
Piccolo, Salvatore
Tedeschi, Piero
Ursino, Giovanni
- Event
-
Veröffentlichung
- (who)
-
Università Cattolica del Sacro Cuore, Dipartimento di Economia e Finanza (DISCE)
- (where)
-
Milano
- (when)
-
2015
- Handle
- Last update
-
10.03.2025, 11:42 AM CET
Data provider
This object is provided by:
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
Object type
- Arbeitspapier
Associated
- Piccolo, Salvatore
- Tedeschi, Piero
- Ursino, Giovanni
- Università Cattolica del Sacro Cuore, Dipartimento di Economia e Finanza (DISCE)
Time of origin
- 2015
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