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51 BizEd July/August 2014 MAR K WRAGG /TH I N KSTOCK WHEN PEOPLE ARE sad, the negative emotion might deter them from eating unhealthy foods, according to a study by Anthony Salerno, a doctoral candidate, and Juliano Laran, an associate professor of marketing, both of the University of Miami School of Business in Florida; and Chris Janiszewski, a professor at the University of Florida's Warrington College of Business Administration in Gainesville. In five experiments, researchers exposed participants to advertisements that included either indulgent words or images (of pizza or chocolate cake, for example) or neutral words or images (of washing machines or electric cars). They then asked participants to write about something that made them feel sad. Then, at the end of the study, they were offered indulgent foods like M&Ms or chocolate chip cookies. The researchers found that those who were exposed to the indulgent advertise- ments and then asked to recall a sad topic consumed less of the post-experiment treats; they also were more likely to link those treats to future health problems. Those exposed to neutral information before writing about a sad topic ate more. The researchers believe that the partici- pants' sadness highlighted the negative consequences of indulging and encouraged them to indulge less. This research can help better people's understanding of "the link between advertisements and their emotional state and how this impacts their eating behavior," says Laren. "For marketers of products encouraging a healthy life- style, this work offers more data regarding [influences] that help or hinder one's ability to eat healthy." "Sadness and Its Context-Dependent Influence on Indulgent Consumption" was slated to appear in the June issue of the Journal of Consumer Research. Chris Janiszewski Juliano Laran Feel Sad, Indulge Less? As crowdfunding becomes more popular, the pos- sibilities for fraud grow. For that reason, so far the U.S. government has not allowed funders to pur- chase stakes in the companies. However, England and Australia already have legalized equity-based crowdfunding, and the United States is soon to follow. In 2012, the U.S. Securities Exchange Com- mission passed the Jumpstart Our Business Startups (JOBS) Act to ease some federal regulations on entrepreneurial ventures. In July 2013, the SEC approved Title II to the JOBS Act, which adds provi- sions for equity crowdfunding. Funders could be better protected if governments put mechanisms in place to make entrepreneurs accountable for committing fraud, demonstrating incompetence, or making false promises, according to a recent book chapter by Ajay Agrawal, associate professor of strategic management at the Univer- sity of Toronto's Rotman School of Management in Canada; Christian Catalini, assistant professor at the MIT Sloan School of Management in Cambridge, Massachusetts; and Avi Goldfarb, professor of market- ing at Rotman. They also recom- mend that governments develop resources that provide funders with information about the startups seek- ing funding. That said, Agrawal also points out that the level of concern over equity crowdfunding could be somewhat misplaced. "It feels like we are being far more protective of people making mistakes buying small amounts of equity through crowdfunding than we are of people making mistakes buying other goods and services on the Internet that are some- times fraudulent, of lower-quality, or overpriced." "Some Simple Economics of Crowdfunding" can be purchased online at www.nber.org/papers/w19133. The paper appears as a chapter in the book Innova- tion Policy and the Economy 2013 by the National Bureau of Economic Research in Boston. Christian Catalini Avi Goldfarb Ajay Agrawal Crowdfunding and Fraud