True Believer Syndrome
True-believer syndrome is a term coined by reformed fraudulent psychic M. Lamar Keene. After exposing himself, along with tricks used by fake psychics and faith healers, Keene noticed that many people continued to believe that he and others were, in fact, genuine. This amazed Keene, who wondered...
"How can an otherwise sane individual become so enamored of a fantasy... that even after it's exposed in the bright light of day he still clings to it — indeed, clings to it all the harder?"
-M. Lamar Keene
Keene believed that True Believer Syndrome is worthy of scientific study.
Some small-scale studies have been undertaken; for example, a study by psychologists Barry Singer and Victor Benassi at California State University showed that more than half of the study's subjects believed a fake psychic to be real, even after they were told that he was fake and his tricks were explained. [Benassi and Singer; Hofstadter]
In another public experiment, debunker James Randi organised an Australian tour by fake psychic "Carlos". When Randi revealed the hoax, many members of the public interviewed by television crews continued to assert that his powers must have been real.
M. Lamar Keene argued that the True Believer Syndrome is what keeps fake psychics in business, i.e. the willingness of people to believe in something even after it has been unequivocally disproven.