Law and Economics of Self-Regulation in Advertising

This paper looks at the effectiveness and usefulness of establishing a self-regulatory entity (SRE) in the advertising sector. In different countries one finds different forms of this type of institution. It may play a role in ensuring that misleading and aggressive advertisements are stopped and furthermore deal with questions of taste and decency of certain advertisements. Taking a broad view a SRE can be classified as a law enforcement mechanism the existence of which may be crucial to induce advertisers to law-abiding, compliant behavior. This paper will present a comparative legal analysis of various European SREs within a law and economics framework