Persuasion knowledge and third-person perceptions in advertising: the moderating effect of regulatory competence

The extant literature shows that third-person perceptions depend on subjective knowledge: The more people think they know, the greater are the perceived communication effects on others than on themselves. This study extends previous research on third-person perceptions by (1) investigating persuasion knowledge's influence on third-person perceptions and related behavior in an advertising context, and by (2) analyzing whether the regulatory competence of the government moderates this effect. The results of two studies, an experiment and a survey, show that subjective knowledge about persuasion attempts in advertising increases third-person perceptions that, in turn, reduce consumers' willingness to recommend a product. This effect is moderated by perceived regulatory competence of the government: the influence of persuasion knowledge on third-person perceptions becomes stronger the weaker the regulatory competence is perceived to be. Furthermore, the influence of persuasion knowledge on third-person perceptions is due to overestimated influences on others. The findings provide implications for advertisers and public policy makers.