Wednesday, October 3, 2007

Product Information

As a type of product is used by many people, knowledge accumulates about its most important characteristics, how it can be used most effectively, and the consequences of its improper use. This information may be included with the product when it is sold. For example, food comes with nutritional information; and drugs come with information about proper use and warnings about potential side effects. For some classes of product, producers are legally required to provide this information, especially where physical harm could result from its misuse. In the best cases, consumers can gain just enough knowledge to determine how satisfied they will be with a product before they purchase it. All too often, however, almost no information is available at the point of purchase (where a consumer buys a product).

Because expectations for a product depend mostly on its intended use, this demand-related information will not necessarily address any larger impact beyond the individual consumer’s happiness and health. If minimizing the negative impact on other people, such as the use of slave labor and generation of pollution in the product’s manufacture, becomes important to enough consumers, the producer may consider changing production practices (thus “adding value” to the product) and then advertise the fact as “information” that will help drive up demand.

Economic purists would argue that the only legitimate way to make products support such goals is for the proponents of minimizing negative impact to convince enough people to value it as much as they do. “Public good” must thus compete with all other wants in an open market, and many people will likely get hurt (thus providing unavoidable information about this effect) before demand is significantly influenced.

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