Wintertime for Deceptive Advertising?

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American Economic Journal: Applied Economics, ISSN: 1945-7782, Vol: 8, Issue: 1, Page: 177-192

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Zinman, Jonathan; Zitzewitz, Eric
American Economic Association
Economics, Econometrics and Finance; Behavioral Economics; Economics; Industrial Organization; Social and Behavioral Sciences
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article description
Casual empiricism suggests that deceptive advertising about product quality is prevalent, and several classes of theories explore its causes and consequences. We provide unusually sharp empirical evidence on its extent, mechanics, and dynamics. Ski resorts self-report substantially more natural snowfall than comparable government sources. The difference is more pronounced on weekends, despite third-party evidence that snowfall is uniform throughout the week-as one would expect given plausibly greater returns to exaggeration on weekends. Exaggeration is greater for resorts that plausibly reap greater benefits from it: those with expert terrain and those not offering money back guarantees.