Ethics Final Ch 6

caveat emptor

"let the buyer beware" today: it is with an era with patent medicines and outrageously false product claims.

subliminal advertising

advertising that communicates at a level beneath conscious awareness, where, some psychologist claim, the vast reservoir of human motivation primary resides.

dependence effect

as a society becomes increasingly affluent wants are increasingly created by the process by which they are satisfied

self regulation

business dislikes regulation and consumer lawsuits or other pressure. but self- regulation sometimes falls short

The responsibilities of businesses to consumers are what ?

concerning product quality, prices, and labeling and packaging

weasel words

help. aid or assist.

childhood obesity

institute of medicine release a report concluding what most Americans probably already suspected " exposure to television ads is associated with obesity in children under 12 "

psychological appeal

is a persuasive effort aimed primarily at emotion, not reason. greatest of moral concern.

exaggeration

making claims unsupported by evidence

federal trade commission FTC

originally created in 1914 as an antitrust weapon, but its mandate was expanded to include protecting consumers against deceptive advertising and fraudulent commercial practices

gullible-consumer standard

prohibits an advertisement that might mislead someone who is ill informed and naive, it would handle a lot more ases and greatly restrict advertising; but in spending its time and resources on such cases, it is not clear that the FTC would be proceeding in response to a substantial public interest, as it is legally charged with doing

consumer needs

some defenders of advertising take these points to strip, they concede that images of glamour, sex, or adventure sell products, but they argue that these images are what we want the consumers want. Galbraith believed that nowadays, instead of shaping the production process, consumer demand tends to be shaped by it.

vertical price fixing

takes place when manufactures and retailers as opposed to direct competitors - agree to set prices

FDA

the food and drug administration how effective is regulation?

consumer sovereignty

the idea that consumers should and do control the market through their purchases. rather than independent consumer demand shaping productions classical economic theory says it does, nowadays it is the other way around

FTC v. Standard education

1937 standard education case moved the law away from the reasonable person standard.

three points about paternalism and safety regulations

1st- the safety of some products or some features of products (such as a car's tires) affects not only the consumer who purchases the product but third parties as well. 2nd- anti paternalism gains plausibility from the view that individuals know their own interests better than anyone else does and that they are fully informed and able to advance this interests. however, when citizens lack knowledge and are unable to make intelligent comparisons and safety judgments, they may find it in their collective self- interest to set minimal safety standards. 3rd- the controversy over legal paternalism pits the values of individual freedom and autonomy against social welfare.

Ads directed at children

FTC advocates even stricter controls over advertisements that reach children because of their susceptibility children need special protection from being enticed and manipulated by advertising

Product safety

The legal and moral responsibilities of manufacturers and the pros and cons of government regulations designed to protect consumers, including the issue of legal paternalism

concealment of facts

advertisers that conceal facts suppress information that is unflattering to their products they neglect to mention or they would distract consumers' attention away from information, knowledge of which would probably make their products less desirable.

Deceptive and morally questionable techniques are used in what ?

advertising

the debate over advertising

advertising does not end with the issue of deceptive techniques and unfair advertising practices. advertising provides little usable information to consumers.

express warranties

are the claims that sellers explicitly state- for example, that a product is shrink proof or will require not maintenance for two years.

ambiguity

continental banking company, charged with this by the Federal trade commission FTC, promotes disclaimers.

deception and unfairness in advertising

conveys very little information, because providing frank product information is not always the most effective way to sell something, advertisers are tempted to misrepresent and deceive.

market economics

critics charge that because advertising only goal is to persuade consumers to buy, there is no reason to think it will enhance well being

free speech and the media

defenders of advertising see it as a necessary and desirable aspect of competition in a freee market system a protected from of free speech, and a useful sposor of the media, in particular television critics challenge all three claims

regulation

help ensure that business meets its responsibilities to consumers, although many products are not as closely regulated as people think and political considerations sometimes interfere with the regulatory process. businesspeople tend to favor self-regulation and government deregulation but as the auto industry shows- this sometimes provides insufficient consumer protection.

strict product liability

holds that the manufacturer of a product has legal responsibilities to compensate the user of that product for injuries suffered because the product's defective condition made it unreasonably dangerous, even though the manufacturer has not been negligent in permitting that defect to occur

implied warranties

include the claim implicit in any sale, that a product is fit for its ordinary intended use

price gouging

is better understood as a seller's exploiting a short term situation in which buyers have few purchase options for a much needed product by raising prices substantially

social desirability of advertising in general

is it a positive feature of our economic system? Does it manipulate, or merely respond to, consumer needs?

reasonable- consumer standard

it would prohibit only advertising claims that would deceive reasonable people. people who are taken in because they are more gullible or less bright than average would be unprotected

merchantability

its not a promise that the product will be perfect; rather, it's a guarantee that it will be of passable quality or suitable for the ordinary purpose for which it is used. implied warranties can also be more specific.

horizontal price fixing

occurs when competitiors agreee to adhere to a set price schedule, not to cut prices below a certain minimum, or to restrict price advertising or the terms of sales discounts or rebates

consumer choice

preventing consumers from being able to choose a cheaper but riskier product can have both economic and ethical drawbacks

labeling and packaging

product labels and packages often fail to tell consumers what they need to know or even exactly what they are getting

consumer product safety commission (CPSC)

protect the public against unreasonable risks of injury associated with consumer products - aids consumers in evaluating product safety, develops uniform standards, gathers data, conducts research and coordinates local, state, and federal product safety laws and enforcement. greenman v. Yuba

FTC

regulates advertising, especially advertising to children

economic costs

safety regulations benefit consumers but raise the price of products. is the expense always worth it?

quantity surcharges

sometimes mislead shoppers, they sell water bottles for $2.50 AND YOU CAN GET A PACK AT ROUSES FOR $4

Due care

the idea that consumers and sellers do not meet as equals and that the consumer's interests are particularly vulnerable to being harmed by the manufacture, who has knowledge and expertise the consumer does not have. Macpherson had the obligation beyond any contract according to the due-care view. manufactures have obligation above and beyond Any contract, to exercise due care to prevent the consumer from being injured by defective products.

legal paternalism

the idea that the law may justifiably be used to restrict the freedom of individuals for their own good.

Argument for strict liability

two broadly utilitarian considerations support strict product liability. 1st - it advocates contend that only such a policy will induce firms to bend over backward to guarantee product safety. 2nd- proponents of strict liability contend that the manufacturer is able to bear the cost of injuries due to defects.

advertising persuasion misleading representation

uses. ambiguity, concealment of relevant facts, exaggeration, and psychological appeals are among the morally dubious techniques that advertisers use

pricing and manipulative pricing

varies

the responsibilities of business

when it comes to consumer safety, the moral responsibilities of business go beyond merely obeying the law. 1. business should give safety the priority warranted by the product 2. business should abandon the misconception that accidents occur exclusively as a result of product misuse and that it is thereby absolved of all responsibility 3. business must monitor the manufacturing process itself 4. when a product is ready to be marketed companies should have their product safety staff review their market strategy and advertising for potential safety problems 5. when a product reaches the marketplace, firms should make available to consumers written information about the products performance 6. companies should investigate consumer complaints and do so quickly