LAW & ECONOMICS COLLOQUIUM
presents
Ahmed Taha
Pepperdine School of Law
Regulating the Advertising of Opinions: An Experimental Investigation
(with John Petrocelli)
Tuesday, October 16, 2018
4:10 - 5:45
Room FL219 (John Willis Classroom)
78 Queen's Park
Advertisements of many goods and services feature endorsements from consumers who have had atypically positive experiences with them. Substantial evidence suggests that consumers often erroneously assume that advertised, atypical results are typical. Thus, the Federal Trade Commission (“FTC”) requires advertisements of atypical results also to disclose the typical results. However, the FTC has created an exception for advertisements featuring atypically positive opinions regarding a product. The exception exists because the FTC assumes that consumers believe that advertised opinions only necessarily represent the opinions of the people expressing the opinions. To test the FTC’s assumption, we conduct a controlled experiment. We find evidence that, contrary to the FTC’s assumption, consumers believe that an advertised opinion is the typical consumer opinion. In addition, we find evidence that requiring these advertisements to also disclose the typical consumer opinion would cause consumers to greatly discount advertised atypical opinions.
Professor Taha's research focuses primarily on consumer and investor protection law. This research reflects both his training in law and in economics in which he holds a Ph.D. His research has been discussed in national media outlets, including the New York Times and the Wall Street Journal. He is also the Faculty Director of the Palmer Center for Entrepreneurship and the Law. Prior to joining the Pepperdine faculty, Professor Taha was a professor at Wake Forest Law School, an attorney in the Antitrust Division of the U. S. Department of Justice in Washington, D.C., a litigation associate with Wilson Sonsini Goodrich & Rosati in Palo Alto, California, and a corporate finance analyst at McKinsey and Company in New York. Professor Taha teaches Civil Procedure, Corporations, and Accounting and Finance for Lawyers
For more colloquium information, please send an email to events.law@utoronto.ca.
