Working Paper: NBER ID: w17829
Authors: Jonathan Zinman; Eric Zitzewitz
Abstract: Casual empiricism suggests that deceptive advertising about product quality is prevalent, and several classes of theories explore its causes and consequences. We provide some unusually sharp empirical evidence on the extent, mechanics, and dynamics of deceptive advertising. Ski resorts self-report substantially more natural snowfall on weekends. Resorts that plausibly reap greater benefits from exaggerating do it more. Data on website visits suggests that consumers are appropriately skeptical of weekend reports. We find little evidence that competition restrains or encourages exaggeration. Near the end of our sample period, a new iPhone application feature makes it easier for skiers share information on ski conditions in real time. Exaggeration falls sharply, especially at resorts with better iPhone reception.
Keywords: deceptive advertising; ski resorts; snowfall reports; consumer behavior; information technology
JEL Codes: D82; D83; K29; L15
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| day of the week (weekend vs. weekday) (J29) | reported snowfall (Y10) |
| introduction of a new iPhone app feature (Y60) | exaggeration (Y60) |
| exaggeration (Y60) | skier visits (Z33) |
| resort characteristics (Z31) | degree of exaggeration (Y60) |
| weekend effect (G14) | consumer skepticism towards resort reports (Z33) |