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Evidence on the effects of mandatory disclaimers in advertising

Author

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  • Green, Kesten C.
  • Armstrong, J. Scott

Abstract

We found no evidence that consumers benefit from government-mandated disclaimers in advertising. Experiments and common experience show that admonishments to change or avoid behaviors often have effects opposite to those intended. We found 18 experimental studies that provided evidence relevant to mandatory disclaimers. Mandated messages increased confusion in all, and were ineffective or harmful in the 15 studies that examined perceptions, attitudes, or decisions. We conducted an experiment on the effects of a government-mandated disclaimer for a Florida court case. Two advertisements for dentists offering implant dentistry were shown to 317 subjects. One advertiser had implant dentistry credentials. Subjects exposed to the disclaimer more often recommended the advertiser who lacked credentials. Women and less-educated subjects were particularly prone to this error. In addition, subjects drew false and damaging inferences about the credentialed dentist.

Suggested Citation

  • Green, Kesten C. & Armstrong, J. Scott, 2012. "Evidence on the effects of mandatory disclaimers in advertising," MPRA Paper 37766, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:37766
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    File URL: https://mpra.ub.uni-muenchen.de/37766/1/MPRA_paper_37766.pdf
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    References listed on IDEAS

    as
    1. Steven M. Shugan, 2006. "Editorial: Who Is Afraid to Give Freedom of Speech to Marketing Folks?," Marketing Science, INFORMS, vol. 25(5), pages 403-410, September.
    2. Danit Ein-Gar & Baba Shiv & Zakary L. Tormala, 2012. "When Blemishing Leads to Blossoming: The Positive Effect of Negative Information," Journal of Consumer Research, Oxford University Press, vol. 38(5), pages 846-859.
    3. Mathios, Alan D, 2000. "The Impact of Mandatory Disclosure Laws on Product Choices: An Analysis of the Salad Dressing Market," Journal of Law and Economics, University of Chicago Press, vol. 43(2), pages 651-677, October.
    4. Clifford Winston & Vikram Maheshri & Fred Mannering, 2006. "An exploration of the offset hypothesis using disaggregate data: The case of airbags and antilock brakes," Journal of Risk and Uncertainty, Springer, vol. 32(2), pages 83-99, March.
    5. Ippolito, Pauline M & Mathios, Alan D, 1995. "Information and Advertising: The Case of Fat Consumption in the United States," American Economic Review, American Economic Association, vol. 85(2), pages 91-95, May.
    6. JS Armstrong, 2004. "Peer Review for Journals: Evidence on Quality Control, Fairness, and Innovation," General Economics and Teaching 0412027, EconWPA.
    7. Clifford Winston, 2008. "The Efficacy of Information Policy: A Review of Archon Fung, Mary Graham, and David Weil's Full Disclosure: The Perils and Promise of Transparency," Journal of Economic Literature, American Economic Association, vol. 46(3), pages 704-717, September.
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    Cited by:

    1. Armstrong, J. Scott & Green, Kesten C., 2013. "Effects of corporate social responsibility and irresponsibility policies," Journal of Business Research, Elsevier, vol. 66(10), pages 1922-1927.

    More about this item

    Keywords

    consumer protection; corrective advertising; decision making; government regulation; judgment;

    JEL classification:

    • H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government
    • M37 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Marketing and Advertising - - - Advertising
    • K23 - Law and Economics - - Regulation and Business Law - - - Regulated Industries and Administrative Law

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