Lessons from an “Oops” at Consumer Reports: Consumers Follow Experts and Ignore Invalid Information

Abstract

In 2007, Consumer Reports released, and two weeks later retracted, a flawed report on the safety of infant car seats. Analyzing data from 5471 online auctions for car seats ending before, during, and after the information was considered valid, this article shows that (1) consumers responded to the new information and, more surprisingly, (2) they promptly ceased to do so when it was retracted. Because of the random nature of the flawed ratings, this first finding demonstrates that expert advice has a causal effect on consumer demand. The second finding suggests that people's inability to willfully ignore information is not as extreme as the experimental evidence in the psychological literature suggests.