Passing-Off?Information Regulation And Quality Investment

Before consumers make purchases,they often need to obtain product quality information.This quality information is usually released to the market by the manufacturer.From the manufacturer's perspective,If there is no relevant law to regulate,Even if the quality of their products is not high,they always have an incentive to exaggerate the quality of their products,mislead consumers with information,and gain more consumers,such as false advertising.The general perception is that misleading information will cause consumers to deviate from product evaluations and guide consumers to make unintended purchases,which is strictly harmful to consumer welfare,so they should be strictly regulated,the regulatory practice of most country is basically based on this opinion.However,the latest research results have found that under a specific market structure,a moderate tolerance for "fuzzy" information can reduce the monopoly power of dominant product markets and affect the quality improvement incentives of enterprises,which may have a positive effect on social welfare.Therefore,the simple "strict punishment" may be biased.Each of the "strict punishment" and "tolerance" views has its own logical and practical significance,but both of them have imperfections.Most of the researches on the "severe punishment" point of view focus on the identification of the behavior itself and the definition of the specific implementation category,but the impact of the behavior on the competition of manufacturers at the level of industrial organizations is rarely involved;In order to better focus on its core conclusions,the study of the "tolerance" perspective only analyzes the reduction of consumer welfare on the side of the negative impact of false information,but lacks the behavior of manufacturers,especially the quality investment behavior This has weakened the impact of false information on social welfare to some extent.This article cuts in from the perspective of industrial organization,introduces the element of product quality investment under the framework of vertical differentiation,and combines the three intrinsically linked elements of false information,counterfeiting behavior,and product quality investment to explore optimal regulatory strength against false information under different market parameter conditions.And by establishing a duopoly differentiated competition model,it is found that when the enterprise's quality investment decision is exogenous,each combination of quality level and regulatory strength corresponds to a price and information decision equilibrium.Then use the Nash equilibrium theory to solve,andfound that in the strong information regulatory equilibrium,the benefits of quality investment are completely occupied by high-quality manufacturers,so its corresponding quality investment level is relatively high;The weak information regulation equilibrium may correspond to a very low level of quality investment,because the quality investment income is shared to low-quality manufacturers at this time;It may also correspond to a very high level of quality investment,because this leapfrogging quality investment can enable high-quality manufacturers to get rid of counterfeiting behaviors of their competitors.At this time,this level is even higher than the level of quality investment under strong information regulations.Comparing the results of social welfare under different equilibriums,this paper finds that the selection of optimal regulatory strength depends on the quality input cost function,quasi-homogeneous cost function,and social welfare's preference for product quality levels.Regulators should weigh the pros and cons through rigorous economic analysis based on actual conditions,and scientifically design the regulatory intensity of false information.