TY  - JOUR
AU  - Mullainathan,Sendhil
AU  - Shleifer,Andrei
TI  - Persuasion in Finance
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 11838
PY  - 2005
Y2  - December 2005
UR  - http://www.nber.org/papers/w11838
L1  - http://www.nber.org/papers/w11838.pdf
N1  - Author contact info:
Sendhil Mullainathan
Department of Economics
Littauer M-18
Harvard University
Cambridge, MA  02138
Tel: 617/496-2720
Fax: 617/495-7730
E-Mail: mullain@fas.harvard.edu

Andrei Shleifer
Department of Economics
Harvard University
Littauer Center M-9
Cambridge, MA 02138
Tel: 617/495-5046
Fax: 617/496-1708
E-Mail: ashleifer@harvard.edu
AB  - Persuasion is a fundamental part of social activity, yet it is rarely studied by economists. We compare the traditional economic model, in which persuasion is communication of objectively valuable information, with a behavioral model, in which persuasion is an effort to fit the message into the audience's already held beliefs. We present a simple formalization of the behavioral model, and compare the two models using data on financial advertising in Money and Business Week magazines over the course of the internet bubble. The evidence on the content of the persuasive messages is broadly consistent with the behavioral model of persuasion.
ER  -