Jim Hawkins Article: Exploiting Advertising

Jim Hawkins of Houston has written Exploiting Advertising, Law and Contemporary Problems, Forthcoming.  Here's the abstract:

Advertising’s goal, we all know, is to cause people to spend more money. Often, it exploits bad decision-making to accomplish it. This Article hopes to turn the tables and offer a way for policymakers to exploit the information presented in advertisements to produce better regulations.

It makes the novel suggestion that legal researchers and policymakers should use advertising to diagnose behavioral market failures. I argue that advertisements reflect companies’ beliefs about how consumers make purchasing decisions. If advertising supplies information that a rational actor would value, then there is good evidence that the market is not experiencing a behavioral market failure. If, on the other hand, advertising only serves to exploit the systematic mistakes that consumers make persists in the market, then it is likely that the market is not functioning efficiently.

I use the reverse mortgage market as a case study to apply my approach. Drawing on recent empirical studies of reverse mortgage advertising, I show how rational choice theory cannot explain some features of the advertising. By exploiting the advertisements for reverse mortgages, policymakers can detect places reverse mortgage customers are likely making systematically poor decisions

Leave a Reply

Your email address will not be published. Required fields are marked *