Scamming Considered as One of the Exact Sciences: 19th Century American Literature Foreshadows Insights of Behavioral Economics
University of Arizona - James E. Rogers College of Law
August 21, 2014
Arizona Legal Studies Discussion Paper No. 13-37
Nineteenth century American literary masters Edgar Allan Poe, Herman Melville, and Mark Twain all examined scamming, exploring both victims’ foibles and scammers’ techniques of manipulation. These authors together made three prescient observations of continuing importance: (1) the methods of smalltime scammers are in some important ways similar to those of large predatory enterprises; (2) scammers carefully study their marks to find weaknesses to exploit with tricks and traps; and (3) scammers’ subjective states of mind are often unfathomable behind masks in which they pose as legitimate and trustworthy. Furthermore, the moral hollowness of confidence men portrayed in 19th century literature provides a metaphor for contemporary businesses that study and then take advantage of consumer misperceptions. The article argues that the humanities arrived much earlier at insights of behavioral economics recently used to develop consumer financial protection law, which now authorizes administrative supervision and enforcement to stop businesses from taking advantage of consumers’ lack of understanding of financial products. Literature thus provides a comparative perspective from which to evaluate and affirm the law’s new efforts to address scamming more effectively.
Number of Pages in PDF File: 44
Keywords: scams, behavioral economics, law and literature, consumer financial protection, consumer protection
JEL Classification: K12, K2
Date posted: August 23, 2013 ; Last revised: August 22, 2014
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