How limiting deceptive practices harms consumers

• 成果类型: Article
• 署名作者: Piccolo, Salvatore; Tedeschi, Piero; Ursino, Giovanni
• 署名单位: Catholic University of the Sacred Heart
• 刊物名称: RAND JOURNAL OF ECONOMICS
• ISSN/ISSBN: 0741-6261
• DOI: 10.1111/1756-2171.12099
• 发表日期: 2015
• 页码: 611-624
• 关键词: information; QUALITY; signal

摘要

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.