| Abstract: |
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. |