Does disclosure matter?

Via Consumer Law & Policy, the punch line of a new study:

We follow the clickstream of 47,399 households to 81 Internet software retailers to measure contract readership as a function of disclosure. We find that making contracts more prominently available does not increase readership in any significant way. In addition, the purchasing behavior of those few consumers who read contracts is unaffected by the one-sidedness of their terms. The results suggest that mandating disclosure online should not on its own be expected to have large effects on contract content.

Regulation, of course, often goes to great lengths to mandate disclosure, and a considerable volume of private litigation is also based on theories that lack of more extensive and prominent disclosure rendered a transaction wrongful. The study is Florencia Marotta-Wurgler, Does Disclosure Matter?NYU Law and Economics Research Paper No. 10-54 [SSRN].

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