‘False Advertising and Consumer Protection Policy’
June 3, 2015 Leave a comment
The CCP seminar series continues on Friday 5th June and we are delighted to welcome back CCP alumnus Christopher Wilson (Loughborough University) who will be presenting ‘False Advertising and Consumer Protection Policy‘. Chris is a Senior Lecturer at the School of Business and Economics at Loughborough University. His research interests encompass industrial organisation and behavioural economics, with a particular interest in the interaction between consumer behaviour and firms’ pricing strategies. An abstract for his paper can be found below.
There is widespread evidence that some firms use false advertising to overstate the value of their products. Using a model in which a regulator is able to punish false claims, we characterize a natural equilibrium in which false advertising occurs probabilistically and actively influences rational consumers. We solve for the optimal level of regulatory punishment under different welfare objectives and establish a set of demand and parameter conditions where optimal policy permits a positive level of false advertising. Further analysis considers wider issues, including the implications for industry self-regulation, product investment, and optimal policy across multiple heterogeneous markets.
The seminar takes place from 13:00-14:00 in the Thomas Paine Study Centre, Room 1.03.