In Advertising, Perception is Reality — But at What Cost to Consumers?

TITLE “A Model of Persuasion in Advertising”

FACULTY-STUDENT RESEARCH TEAM Alice S. Hsiaw, assistant professor of economics, with Megan Quinn '13 WHAT THEY’RE RESEARCHING “The project on persuasion and advertising aims to explain how meaningless or uninformative advertising claims affect consumers' perceptions of a good's quality, and how this affects a firm's pricing and advertising strategy," says Hsiaw. “The question of interest is, how can this type of uninformative advertising ‘fool’ consumers into believing that the advertised good is better than it actually is? How does this affect firms’ advertising and pricing decisions, and consumer welfare?”

WHAT THE STUDENTS GOT OUT OF IT “Working as a summer research assistant in the economics department has been a wonderful learning experience allowing me to take part in intellectually stimulating conversations with fellow students and professors,” says Quinn. “I love taking theories and models beyond the classroom and applying them to new, interesting scenarios. My professors have taken the time to teach me the skills necessary for undertaking my own research projects in the future.” HOW DOES HAVING THE STUDENT ADVANCE OR ENHANCE THE RESEARCH? “Having student support has been helpful because it brings fresh perspective to a problem. Moreover, having to structure tasks for a student to perform has helped to focus and direct my thinking on how to approach questions,” says Hsiaw.

WHAT ARE THE NEXT STEPS WITH YOUR RESEARCH? “As this project advances, I would like to explore when consumers might choose to educate themselves in this environment. For example, when will they choose to pay for a third-party authority like Consumer Reports to educate themselves? If firms can choose to direct different advertising content to media sources with different audiences (like Reader's Digest versus Popular Photography), how does this affect consumers' beliefs about product quality?” says Hsiaw.

During the summer, we visited five on-campus summer research teams. Take a look at their projects:

	Does the Dodo Deserve Its Bad Rap?
	Researching Laser-Cooled Atoms and How They Could Improve GPS Systems
	In Advertising, Perception is Reality — But at What Cost to Consumers?
	Research Team Travels to Wisconsin to Explore Recall Election in American Politics
	View a list of symposium presenters, their project titles, and descriptions [PDF].

• Harvard University's Center for Hellenic Studies: "Thinking Like a Revolutionary: Interview with Homer Multitext Researcher Stephanie Lindeborg ’13"