Logo
Munich Personal RePEc Archive

False Advertising

Rhodes, Andrew and Wilson, Chris M (2015): False Advertising.

[thumbnail of MPRA_paper_68869.pdf]
Preview
PDF
MPRA_paper_68869.pdf

Download (510kB) | Preview

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 self-regulation.

Atom RSS 1.0 RSS 2.0

Contact us: mpra@ub.uni-muenchen.de

This repository has been built using EPrints software.

MPRA is a RePEc service hosted by Logo of the University Library LMU Munich.