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Taking Behavioralism Seriously: Some Evidence of Market Manipulation

Jon D. Hanson

Harvard Law School

Douglas A. Kysar

Yale University - Law School

Harvard Law Review, Vol. 112, p. 1420, 1999
Harvard Public Law Working Paper No. 08-52

An important lesson of behavioralist research is that individuals' perceptions and preferences are highly manipulable. This article presents empirical evidence of market manipulation, a previously unrecognized source of market failure. It surveys extensive qualitative and quantitative marketing research and consumer behavioral studies, reviews common practices in settings such as gas stations and supermarkets, and examines environmentally oriented and fear-based advertising. The article then focuses on the industry that has most depended upon market manipulation: the cigarette industry. Through decades of sophisticated marketing and public relations efforts, cigarette manufacturers have heightened consumer demand and lowered consumer risk perceptions. Such market manipulation may justify moving to enterprise liability, the regime advocated by the first generation of product liability scholars.

Number of Pages in PDF File: 149

Keywords: economic behavioralism, market manipulation, marketing, public relations, products liability, law and economics, tobacco industry, cigarette industry

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Date posted: October 19, 2008 ; Last revised: January 21, 2009

Suggested Citation

Hanson, Jon D. and Kysar, Douglas A., Taking Behavioralism Seriously: Some Evidence of Market Manipulation. Harvard Law Review, Vol. 112, p. 1420, 1999; Harvard Public Law Working Paper No. 08-52. Available at SSRN: http://ssrn.com/abstract=1286703

Contact Information

Jon D. Hanson (Contact Author)
Harvard Law School ( email )
1563 Massachusetts
Griswold 403
Cambridge, MA 02138
United States
607-496-5207 (Phone)
HOME PAGE: http://www.law.harvard.edu/faculty/directory/facdir.php?id=25
Douglas A. Kysar
Yale University - Law School ( email )
P.O. Box 208215
New Haven, CT 06520-8215
United States

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