Debunking Misinformation about Consumer Products: Effects on Beliefs and Purchase Behavior

Abstract

The prevalence of misinformation has spurred various interested parties--regulators, the media, and competing firms--to debunk false claims in the marketplace. This paper studies whether such debunking messages provided by these parties can impact consumer purchase behavior. If so, does debunking effectively correct consumers' misinformed beliefs--an ideal outcome from a policy-maker's perspective--or does it merely reinforce correct beliefs, as predicted by biased belief updating? With theory providing contradictory predictions, we design and implement a conjoint experiment that enables us to measure willingness-to-pay under exposure to real-world misinformation and debunking messages. Focusing on three ingredients in product categories where misinformation is prevalent (aluminum in deodorants, fluoride in toothpastes, and GMOs in food), we find that debunking plays an important role in mitigating the impact of misinformation. More specifically, debunking can repair the decrease in willingness-to-pay caused by misinformation by correcting misbeliefs, a promising finding for policy-makers. We discuss the incentives for firms to debunk misinformation or to introduce new products that conform to misinformation.

Keywords: debunking, misinformation, deceptive advertising, social media, beliefs, conjoint, policy

JEL Classification: M31, M37, M38, L1, L15, I18, D83,D84