Appliance Warranties as a Market Signal?

Appliance warranties can be considered to provide a market signal of appliance reliability. However, the cost to consumers of obtaining enough information to interpret the signal causes the dispersion of warranty provisions to be limited. The more complicated the laws surrounding warranties, the greater the cost to consumers of warranty information. This makes warranties less effective as a market signal and reduces the variation in warranty provisions. Upon examination, appliance warranties for refrigerators, air conditioners, ranges, clothes washing machines, and television sets were found, consistent with this view, to vary relatively little.