Information disclosure and consumer awareness

Sanxi Li, Martin Peitz, Xiaojian Zhao

Research output: Contribution to journalArticleResearchpeer-review

7 Citations (Scopus)

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.

Original languageEnglish
Pages (from-to)209-230
Number of pages22
JournalJournal of Economic Behavior and Organization
Volume128
DOIs
Publication statusPublished - Aug 2016
Externally publishedYes

Keywords

  • Behavioral bias
  • Behavioral industrial organization
  • Consumer awareness
  • Consumer protection
  • Information disclosure
  • Informative advertising
  • Non-common prior
  • Targeted advertising

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