Deception, Decisions, and Investor Education

44 Pages Posted: 30 Oct 2008 Last revised: 11 May 2009

Date Written: October 29, 2008


Tens of millions of dollars are spent each year to fund educational programs aimed at elderly investors. Many of these programs focus on fraud prevention. In this Article, Professor Barnard questions the effectiveness of these programs. Drawing on recent studies from marketing scholars, neurobiologists, social psychologists, and behavioral economists examining the ways in which older adults process information, she offers a model of decision making (the deception/decision cycle) that explains why older adults are disproportionately vulnerable to investment fraud schemes. She then suggests that many of the factors that contribute to fraud victimization are unlikely to be influenced by fraud prevention education. She suggests some alternative uses for the money now spent on fraud prevention education that would better achieve the goal of protecting investors.

Keywords: fraud, cognitive biases, scamming vulnerability, Iowa Gambling Task, deception/decision cycle

Suggested Citation

Barnard, Jayne W., Deception, Decisions, and Investor Education (October 29, 2008). Elder Law Journal, Vol. 17, No. 2, 2009, Available at SSRN:

Jayne W. Barnard (Contact Author)

William & Mary Law School ( email )

South Henry Street
P.O. Box 8795
Williamsburg, VA 23187-8795
United States
(757) 221-3849 (Phone)
(757) 221-3261 (Fax)

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