Disclosure, Agents, and Consumer Protection
New York University School of Law
July 15, 2010
Journal of Institutional and Theoretical Economics, Vol. 167 (2011)
NYU Law and Economics Research Paper No. 10-33
Consumers make mistakes, and sophisticated market actors exploit those mistakes. Efforts to promote consumer protection through soft paternalistic interventions, most notably improved disclosure regimes, run into the problem that consumers are overwhelmed by information and may not to invest the time and effort necessary to take advantage of more information. This paper reviews recent attempts to protect consumers without recourse to command-and-control regulation. Instead of further overwhelming consumers with information, this paper proposes that efforts to aid beleaguered consumers should take the form of facilitating a market for intermediaries where independent agents or competitive firms have incentives to assist consumer protection.
Number of Pages in PDF File: 17
JEL Classification: K12
Date posted: July 15, 2010 ; Last revised: December 19, 2012
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