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Strategic Obfuscation and Consumer Protection Policy

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  • Yiquan Gu
  • Tobias Wenzel

Abstract

type="main"> This paper studies obfuscation decisions by firms. We show that more prominent firms are more likely to obfuscate. While prominent firms always choose maximum obfuscation, the obfuscation by less prominent firms depends on the degree of asymmetry in prominence and consumer protection policy. We evaluate the impact of a consumer protection policy that limits the scope of obfuscation. We show that such a policy may not be effective as less prominent firms may increase their obfuscation practice.

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  • Yiquan Gu & Tobias Wenzel, 2014. "Strategic Obfuscation and Consumer Protection Policy," Journal of Industrial Economics, Wiley Blackwell, vol. 62(4), pages 632-660, December.
    • Handle: RePEc:bla:jindec:v:62:y:2014:i:4:p:632-660
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