Sold a dream: An experimental test of the predictions of the Elaboration Likelihood Model of Persuasion in a predatory student lending scenario

Understanding why consumers fall prey to fraud and scams is a critically important area of research. Yet few comprehensive models of fraud victimization exist. The Elaboration Likelihood Model of Persuasion (ELM; Petty & Cacioppo, 1986) is a possible exception (e.g., Rusch, 1999; Langenderfer & Shimp, 2001; Lea et al., 2009), but the predictions of ELM remain to be empirically tested in a fraud-related decision context. Here, four experiments testing the predictions of ELM in a predatory student lending scenario are presented. Although results only partially supported the predictions of ELM, it is suggested that ELM can continue to serve as a useful framework to better understand consumers’ vulnerability to fraud. With 44 million student loan borrowers in the U.S. today owing a collective $1.48 trillion, it is critical that research continues to focus on better understanding disadvantageous decision-making in this context

An Investigation of Foreign Language Use as a Protectant against Loss Aversion

Keysar et al. (2012) suggested that bilingual speakers might be less loss averse when interacting in their non-native, rather than native, language. Diminished loss aversion would likely protect homebuyers against predatory lending, as loss aversive tendencies often lead to non-normative decision-making. Thus, it is possible that speaking a foreign language can act as a protective factor for bilingual consumers and potential homebuyers. Two experiments investigated this possibility. Experiment 1 utilized the Asian Disease problem (Kahneman & Tversky, 1979) in a survey to examine whether bilingual participants would choose different values and comparison words to describe gains and losses depending on whether they were interacting in Spanish, their native language, or English, their non-native language. Based on the results of experiment 1, it was hypothesized in experiment 2 that the present interaction of language and frame might be dependent upon the consideration of certain (larger) numeric values. Experiment 2 therefore utilized increased numeric values in its survey questions to address this possibility. Although no significant interaction was found, the results of experiment 2 provide supplementary evidence for the use of English, the present participants’ foreign language, as a protective factor for bilingual individuals. Considering the number of bilingual consumers in the United States, many of whom are likely to use English when seeking a home loan, mortgage counseling, or financial planning, these findings have critically important implications