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Title:Strategic obfuscation and consumer protection policy in financial markets: Theory and experimental evidence PDF Logo
Authors:Gu, Yiquan
Wenzel, Tobias
Issue Date:2012
Series/Report no.:DICE Discussion Paper 76
Abstract:This paper studies obfuscation decisions by firms in retail financial markets theoretically and experimentally. We show that more prominent firms are more likely to obfuscate. While prominent firms always choose maximum obfuscation, the obfuscation by less prominent firms depends on the degree of asymmetry in prominence and consumer protection policy. We evaluate the impact of a consumer protection policy that limits the scope of obfuscation. We show that such a policy may not be effective as less prominent firms may increase their obfuscation practice.
Subjects:Obfuscation
Financial markets
Consumer protection
Experiment
JEL:G20
D14
D18
C92
ISBN:978-3-86304-075-8
Document Type:Working Paper
Appears in Collections:DICE Discussion Paper, Düsseldorf Institute for Competition Economics (DICE)

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