Sometimes product safety labels send the wrong message — Juanjuan Zhang

MIT Sloan Associate Prof. Juanjuan Zhang

MIT Sloan Associate Prof. Juanjuan Zhang

Transparency and full disclosure are popular notions, especially when applied to consumer product safety. If people have full access to knowledge about product content, then they can decide for themselves whether the product is safe, according to the prevailing view.

But when mandated by public policy, transparency and disclosure can have harmful unintended consequences, I have found in my research. For some consumers, the very fact that government requires disclosure about a product raises a red flag. Individuals will conclude that the government knows something they don’t about the product.  Many people will believe the product content that requires disclosure is unsafe and then not consume the product—even if it does not contain any harmful ingredients.

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