Jayne Barnard, the Cutler Professor of Law at William and Mary Law School, has recently posted an extremely interesting article titled “Deception, Decisions and Investor Education” (17 Elder Law Journal (forthcoming 2009)) on SSRN. The approach and conclusions will make any Situationist proud. Here’s the abstract.
* * *
Tens of millions of dollars each year are spent on investor education. Because older adults (those aged 60 and older) are disproportionately victims of investment fraud schemes, many educational programs are targeted at them. In this Article, Professor Barnard questions the effectiveness of these programs. Drawing on recent studies from marketing scholars, neurobiologists, social psychologists, and behavioral economists examining the ways in which older adults process information and make decisions, she offers a model of decision making (the “deception/decision cycle”) that explains why older adults are often vulnerable to investment fraud schemes. She then suggests that many of the factors that contribute to fraud victimization are unlikely to be influenced by fraud prevention education. She suggests some alternative uses for the money now spent on fraud prevention education that would better achieve the goal of protecting older investors.
* * *