Chris Auld wrote: >Suppose that some behavior is affected by information provided by official >sources. Suppose further that by distorting or withholding information >the official may change behavior in a socially desirable manner (ignore >credibility issues). Should the official engage in such manipulations? >... health officials deliberately over-emphasize the dangers of smoking? >... appears to be exactly what has happened (see Viscusi JPE 1990). >Does anyone know of any literature on this or similar topics?
If consumers can be considered roughly rational about such things, then my paper below seems relevant. This is basically a question of cheap talk equilibria, which is basically a commitment issue. Ex post, the official can gain by manipulating, but ex ante, the official can gain by committing to not manipulating. If you can commit to always being truthful, then people will believe what you say more, which is good on average. But if you haven't committed, then sometimes you can gain by lying. --------------------------------------------------------------------------- Journal of Public Economics, 85(2):301-317, August 2002 http://hanson.gmu.edu/bandrug.pdf or .ps Warning Labels as Cheap-Talk: Why Regulators Ban Drugs by Robin Hanson One explanation for drug bans is that regulators know more than consumers about product quality. But why not just communicate the information in their ban, perhaps via a ``would have banned" label? Because product labeling is cheap-talk, any small market failure tempts regulators to lie about quality, inducing consumers who suspect such lies to not believe everything they are told. In fact, when regulators expect market failures to result in under-consumption of a drug, and so would not ban it for informed consumers, regulators ex ante prefer to commit to not banning this drug for uninformed consumers. --------------------------------------------------------------------------- Robin Hanson [EMAIL PROTECTED] http://hanson.gmu.edu Asst. Prof. Economics, George Mason University MSN 1D3, Carow Hall, Fairfax VA 22030-4444 703-993-2326 FAX: 703-993-2323
