Fraudulent Advertising Susceptibility: An Experimental Approach

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