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Note on the need for rules on misleading representation based on experimental evidence

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  • Koki Arai

Abstract

This article examines the rules for misleading representation with an experimental approach using Internet questionnaire data from a recent research article. The findings indicate that consumers who have been closely associated with the goods or who fully intend to purchase the goods are highly likely to understand any (alleged) deceptive advertising. Therefore, advertising regulations should protect marginal consumers from deceptive advertising rather than the actual or potential purchasers. The findings therefore corroborate the inducing requirement of the rules for misleading representation presently applied in Japan and other countries.

Suggested Citation

  • Koki Arai, 2013. "Note on the need for rules on misleading representation based on experimental evidence," Applied Economics Letters, Taylor & Francis Journals, vol. 20(1), pages 10-17, January.
    • Handle: RePEc:taf:apeclt:v:20:y:2013:i:1:p:10-17
    DOI: 10.1080/13504851.2012.665591
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    References listed on IDEAS

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    1. Nelson, Phillip, 1970. "Information and Consumer Behavior," Journal of Political Economy, University of Chicago Press, vol. 78(2), pages 311-329, March-Apr.
    2. Peltzman, Sam, 1981. "The Effects of FTC Advertising Regulation," Journal of Law and Economics, University of Chicago Press, vol. 24(3), pages 403-448, December.
    3. Luke Garrod, 2007. "Price Transparency and Consumer Naivety in a Competitive Market," Working Paper series, University of East Anglia, Centre for Competition Policy (CCP) 2007-10, Centre for Competition Policy, University of East Anglia, Norwich, UK..
    4. Nelson, Philip, 1974. "Advertising as Information," Journal of Political Economy, University of Chicago Press, vol. 82(4), pages 729-754, July/Aug..
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