Role of Government in Information Provision
- Seeing as information failure is one of the causes of market failure, it seems logical to expect governments to provide information in order to correct market failure
- This is mainly with respect to the provision of demerit goods
- Governments have been keen to provide information on social costs as well as private costs involved in a product’s consumption
- In most cases, such information has been accompanied by regulations and laws
- The government also ensures, through the Advertising Standards Agency, that the advertisers are truthful about the claims made about their products – particularly health and beauty
- Via this, it is hoped that consumers will receive truthful and impartial information