Article ID | Journal | Published Year | Pages | File Type |
---|---|---|---|---|
7242798 | Journal of Economic Behavior & Organization | 2016 | 47 Pages |
Abstract
Whether consumers are aware of potentially adverse product effects is key to private and social incentives to disclose information about undesirable product characteristics. In a monopoly model with a mix of aware and unaware consumers, a larger share of unaware consumers makes information disclosure less likely to occur. Since the firm is not interested in releasing information to unaware consumers, a more precise targeting technology that allows the firm to better keep unaware consumers in the dark leads to more disclosure. A regulator may want to intervene in this market and impose mandatory disclosure rules.
Keywords
Related Topics
Social Sciences and Humanities
Economics, Econometrics and Finance
Economics and Econometrics
Authors
Sanxi Li, Martin Peitz, Xiaojian Zhao,