Fraudulent Advertising Susceptibility: An Experimental Approach

106 Pages Posted: 14 Apr 2015 Last revised: 20 Apr 2016

See all articles by Patrick McAlvanah

Patrick McAlvanah

Federal Trade Commission - Bureau of Economics

Keith B. Anderson

US Federal Trade Commission - Bureau of Economics

Robert Letzler

Government Accountability Office (GAO)

Jack Mountjoy

University of Chicago - Booth School of Business

Date Written: April 2015

Abstract

We employ experimental economics techniques to gain insight into the factors that affect consumer susceptibility to fraudulent advertising. We asked participants to rate the credibility of a series of mock-ups of plausible and implausible print advertisements that we designed. We then measured a variety of economic, psychological, and demographic variables and examined their relationship with consumers’ assessments of the credibility of plausible and implausible advertisements. Consumer literacy, impulsivity, numeracy, overconfidence, and skepticism were significantly associated with participants’ credibility assessments of implausible ads.

JEL Classification: C91, D18

Suggested Citation

McAlvanah, Patrick and Anderson, Keith B. and Letzler, Robert and Mountjoy, Jack, Fraudulent Advertising Susceptibility: An Experimental Approach (April 2015). Available at SSRN: https://ssrn.com/abstract=2593898 or http://dx.doi.org/10.2139/ssrn.2593898

Patrick McAlvanah (Contact Author)

Federal Trade Commission - Bureau of Economics ( email )

600 Pennsylvania Ave NW
Mail Drop HQ238
Washington, DC 20580
United States

Keith B. Anderson

US Federal Trade Commission - Bureau of Economics ( email )

601 Pennsylvania Avenue, NW
Washington, DC 20580
United States

Robert Letzler

Government Accountability Office (GAO) ( email )

441 G St., NW
Washington, DC 20548
United States

Jack Mountjoy

University of Chicago - Booth School of Business ( email )

5807 S. Woodlawn Avenue
Chicago, IL 60637
United States

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