Working Paper: NBER ID: w12720
Authors: Sendhil Mullainathan; Joshua Schwartzstein; Andrei Shleifer
Abstract: We present a model of coarse thinking, in which individuals group situations into categories, and transfer the informational content of a given message from situations in a category where it is useful to those where it is not. The model explains how uninformative messages can be persuasive, particularly in low involvement situations, and how objectively informative messages can be dropped by the persuader without the audience assuming the worst. The model sheds light on product branding, the structure of product attributes, and several puzzling aspects of mutual fund advertising.
Keywords: Coarse Thinking; Persuasion; Advertising; Product Branding
JEL Codes: G23; L15; M31; M37
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| persuasive messages (M38) | audience beliefs (D83) |
| coarse thinking (K40) | transference of information across contexts (D83) |
| audience sophistication (L15) | effectiveness of non-informative messages (D83) |
| coarse thinking (K40) | overreaction in beliefs about product quality (L15) |