Consumers, Seller-Advisors, and the Psychology of Trust

62 Pages Posted: 21 Mar 2018  

Justin Sevier

Florida State University - College of Law

Kelli Alces Williams

Florida State University - College of Law

Date Written: March 16, 2018

Abstract

Every day, consumers ask sellers for advice. Because they do not or cannot know better, consumers rely on that advice in making financial decisions of varying significance. Sellers, motivated by strong and often conflicting self-interests, are well-positioned to lead consumers to make decisions that are profitable for sellers and may be harmful to the consumers themselves. Short of imposing fraud liability in extreme situations, the law neither protects the trust consumers place in “seller-advisors,” nor alerts them to the incentives motivating the advice that sellers give.

This Article makes several contributions to the literature. First, it identifies and defines the seller-advisor. Sellers and advisors are usually regarded separately by the law; therefore, consumers interacting with them are protected by different rules. As a result, a false dichotomy has arisen between (1) a doctrine of caveat emptor, subject to liability for fraud and applying to consumers interacting with sellers, and (2) fiduciary duties protecting consumers interacting with advisors. This Article is the first attempt to study consumer trust in the many common transactions that fall somewhere in the space between. Second, in reporting the results of an original psychology experiment, this Article offers empirical evidence of how consumers’ decision making is influenced by the trust they place in seller-advisors. Finally, it explores how consumer trust in seller-advisors arises and how it can be manipulated in an effort to understand how legal policy should respond to both the ubiquity of seller-advisors and the consequences of consumer reliance on, and vulnerability to, their advice.

Keywords: Consumer Law, Business Law, Fiduciary Law, Experiment, Psychology

Suggested Citation

Sevier, Justin and Williams, Kelli Alces, Consumers, Seller-Advisors, and the Psychology of Trust (March 16, 2018). Boston College Law Review, Forthcoming; FSU College of Law, Law, Business & Economics Paper No. 18-2. Available at SSRN: https://ssrn.com/abstract=3142425

Justin Sevier (Contact Author)

Florida State University - College of Law ( email )

425 W. Jefferson Street
Tallahassee, FL 32306
United States

Kelli Alces Williams

Florida State University - College of Law ( email )

425 W. Jefferson Street
Tallahassee, FL 32306
United States

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