Why do people pay for useless advice?
Powdthavee, N. & Riyanto, Y. E.
(2012).
Why do people pay for useless advice?
(CEP Discussion Papers CEPDP1153).
London School of Economics and Political Science. Centre for Economic Performance.
We investigated experimentally whether people can be induced to believe in a non-existent expert, and subsequently pay for what can only be described as transparently useless advice about future chance events. Consistent with the theoretical predictions made by Rabin (2002) and Rabin and Vayanos (2010), we show empirically that the answer is yes and that the size of the error made systematically by people is large.
| Item Type | Working paper |
|---|---|
| Copyright holders | © 2012 The Author(s) |
| Departments | LSE > Research Centres > Centre for Economic Performance |
| Date Deposited | 22 Feb 2024 |
| URI | https://researchonline.lse.ac.uk/id/eprint/121779 |