Unintended Consequences of Health Supplement Information Regulations: The Importance of Recognizing Consumer Motivations

Abstract

Information regulation is intended to enhance consumer decision making. However, past studies raise concerns about the effects of such remedies. Using qualitative methods, this research provides a contextualized, in-depth view of consumer responses to information regulation. The dietary supplement industry provides an informative case for studying the unintended consequences of reducing market restraints. Our findings provide insight into the potential maladaptive behaviors that may accompany information remedies and highlight the importance of considering consumer motivations in regulation design. Real consumer protection can only be forged with an understanding of consumer biases and the unintended impacts likely from such policy intervention. The information which marketers communicate to consumers through product labels, advertisements, Web sites and other materials must comply with governmental regulations designed to govern the flow and quality of market information. These regulations are intended to enhance consumer decision making, stimulate competitive activity and protect public health and welfare without placing undue burdens upon business. Among regulatory options, information disclosure has become the preferred consumer protection remedy advocated by economists, the courts, regulators and business. Ideally, disclosures provide relevant product information allowing for consumers’ self-protection through search without infringement upon individual preferences (Beales, Craswell, and Salop 1981). However, both field and experimental research offer mixed findings about the ways in which information remedies guide individual choice given consumer differences in motivation and processing (France and Bone 2005; Hill, Ramp, and Silver 1998; Johar and Simmons 2000; Mason, Scammon, and Fang 2007; Moorman 1996; Roe, Levy, and Derby 1999). Despite such evidence that suggests consumer differences