The Failure of Mandated Disclosure
University of Chicago Law School
Carl E. Schneider
University of Michigan Law School
March 1, 2010
U of Chicago Law & Economics, Olin Working Paper No. 516
U of Michigan Law & Econ, Empirical Legal Studies Center Paper No. 10-008
This article explores the spectacular prevalence, and failure, of the single most common technique for protecting personal autonomy in modern society: mandated disclosure. The article has four sections:
(1) A comprehensive summary of the recurring use of mandated disclosures, in many forms and circumstances, in the areas of consumer and borrower protection, patient informed consent, contract formation, and constitutional rights;
(2) A survey of the empirical literature documenting the failure of the mandated disclosure regime in informing people and in improving their decisions;
(3) An account of the multitude of reasons mandated disclosures fail, focusing on the political dynamics underlying the enactments of these mandates, the incentives of disclosers to carry them out, and, most importantly, on the ability of disclosees to use them;
(4) An argument that mandated disclosure not only fails to achieve its stated goal but also leads to unintended consequences that often harm the very people it intends to serve.
Number of Pages in PDF File: 71working papers series
Date posted: March 9, 2010 ; Last revised: April 13, 2010
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