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Bounded Rationality, Paternalism, And Trademark Law, Stacey Dogan

Faculty Scholarship

We don’t need behavioral economics to understand that trade marks can shape consumer preferences in ways that have little to do with objectively measurable differences in product quality. Scholars, judges, economists, and policymakers have long recognized the tendency of strong marks to skew consumer decisions. The concern lies not only in price effects but with the allocative effects of encouraging investment in persuasive advertising, rather than product innovation or similar “productive” pursuits. While informative advertising can benefit consumers, advertising that creates artificial brand-based differences between otherwise identical products appears not only costly to consumers but also socially wasteful.

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