How Do Restrictions on Advertising Affect Consumer Search?

• 成果类型: Article
• 署名作者: Chiou, Lesley; Tucker, Catherine E.
• 署名单位: Occidental College; Massachusetts Institute of Technology (MIT)
• 刊物名称: MANAGEMENT SCIENCE
• ISSN/ISSBN: 0025-1909
• DOI: 10.1287/mnsc.2021.3980
• 发表日期: 2022
• 页码: 866-882
• 关键词: search advertising; pharmaceuticals; advertising regulation

摘要

Advertising is often criticized for presenting only partial or selective information about products. This criticism is particularly pronounced for health products, where large asymmetries in information may exist between consumers and firms. This paper explores how government restrictions designed to prevent selective advertising affect the types of information to which consumers are exposed. We exploit a natural experiment in the form of a U.S. Food and Drug Administration (FDA) crackdown that prevented pharmaceutical companies from using selectively chosen information in their Internet search ads. Because companies could not adequately document side effectswithin the advertising space allowed, they removed their ads. Our results suggest that, after the ads were removed, consumers were more likely to seek information from websites based on usergenerated content or websites that focused on medical treatments not regulated by the FDA, such as Canadian pharmacies and sites promoting herbal remedies.