Aastha Gupta

I am an Assistant Professor in the Department of Economics and Decision Sciences at Western Illinois University. I received my Ph.D. in Economics from the Department of Economics at Southern Methodist University in May 2022. My dissertation, "Essays in Advertising, Regulation, and Consumer Naivety", was written under the supervision of Prof. Santanu Roy and can be viewed here.

My research interests are Industrial Organization, Information Economics, and Behavioral Economics. I currently focus on issues related to the communication and advertising strategies of the firms and the possibility of deception of consumers. I investigate the impact of regulatory measures directed toward the protection of consumers, including behaviorally naive consumers.

I hold a Bachelor's degree in Economics from the University of Delhi, India; a Master's degree in Economics from Delhi School of Economics, India and a second Master's degree in Economics from Southern Methodist University, USA.

CV (Updated: 05/12/2024)

RESEARCH

Publications


Deceptive Advertising, Regulation, and Naive Consumers [Online Appendix]

(International Journal of Industrial Organization, December 2023)

Abstract: In markets where buyers have incomplete information about product quality, consumer sophistication strengthens the case for stronger regulation of deceptive advertising by firms. In a model where a fraction of buyers are naive (i.e., cannot update beliefs based on market signals and believe all advertising claims) and they stand to gain from receiving reliable information about product quality, I show that the socially optimal level of penalty is (a) substantially higher than the penalty required to merely avoid deception by firms and (b) increasing in the proportion of sophisticated buyers. The optimal penalty for false advertising not only discourages deception but also reduces prices by eliminating signaling distortion. Moreover, a low level of penalty is worse than no penalty from a social welfare standpoint.


Working Papers


Regulating The Influencers: Who Gains from FTC Regulation?

Abstract: Consumers increasingly rely on product reviews by influencers to make a purchase decision. As firms have an incentive to influence the reviewers through unobserved payments, it can be difficult to sustain market outcomes with informative independent reviews. Recent FTC regulations require mandatory disclosure of all paid advertising content so that buyers can differentiate between paid and independent product reviews. This paper investigates the impact of this disclosure policy on market outcomes when the influencer has the expertise to evaluate product quality and influence the beliefs of potential buyers. The results indicate that disclosure policy decreases the prevalence of paid reviews, though they persist. Consequently, there is an increased likelihood of no reviews, which impedes the dissemination of valuable information regarding product quality to consumers and an increased likelihood of independent reviews, which improves the quality of the information. The key implication is that the effectiveness of the disclosure regulation is non-existent or even negative when the regulatory concerns are at their maximum.

TEACHING

Primary Instructor

Western Illinois University

Principles of Microeconomics: Fall 2022

Intermediate Microeconomics: Fall 2022, Fall 2023, Fall 2024

Mathematical Economics: Spring 2023, Spring 2024, Fall 2024

Digital Economy: Fall 2023, Fall 2024

Managerial Economics: Fall 2022 - Fall 2024

Southern Methodist University

Theory of Industrial Structure: Summer 2017

Intermediate Macroeconomics: Summer 2021

Teaching Assistant

Graduate Level, Southern Methodist University

Microeconomic Theory (Ph.D.): Fall 2016, Fall 2019

Trade Policy (Masters): Spring 2016

Economic Development (Masters): Spring 2016

International Corporate Strategy (MBA): Fall 2021

Advanced Strategic Management (MBA): Fall 2021

Undergraduate Level, Southern Methodist University

Principles of Microeconomics: Fall 2015, Spring 2017, Fall 2017, Spring 2018, Fall 2018, Spring 2019, Fall 2019, Spring 2020, Fall 2021

Principles of Macroeconomics: Fall 2017, Spring 2018, Spring 2020, Spring 2022

Intermediate Microeconomics: Fall 2015, Spring 2018

Price Theory: Fall 2016, Spring 2017, Fall 2017, Fall 2018

Money and Banking: Spring 2017, Fall 2017, Fall 2018

Financial Economics: Fall 2019, Spring 2020

CONTACT