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Does Anyone Read the Fine Print? Consumer Attention to Standard Form Contracts

47 Pages Posted: 4 Aug 2009 Last revised: 17 Sep 2014

Yannis Bakos

New York University (NYU) - Department of Information, Operations, and Management Sciences

Florencia Marotta-Wurgler

New York University School of Law

David R. Trossen

Knobbe Martens Olson & Bear LLP

Date Written: January 1, 2014

Abstract

A cornerstone of the law and economics approach to standard-form contracts is the informed-minority hypothesis: in competitive markets, a minority of term-conscious buyers is sufficient to discipline sellers from using unfavorable boilerplate terms. This argument is often invoked to limit intervention or regulate consumer transactions, but there has been little empirical investigation of its validity. We track the Internet browsing behavior of 48,154 monthly visitors to the Web sites of 90 online software companies to study the extent to which potential buyers access the end-user license agreement. We find that only one or two of every 1,000 retail software shoppers access the license agreement and that most of those who do access it read no more than a small portion. Since the cost of comparison shopping online is so low, the limiting factor in becoming informed thus seems not to be the cost of accessing license terms but reading and comprehending them.

Suggested Citation

Bakos, Yannis and Marotta-Wurgler, Florencia and Trossen, David R., Does Anyone Read the Fine Print? Consumer Attention to Standard Form Contracts (January 1, 2014). Journal of Legal Studies, Vol. 43, No. 1, 2014; CELS 2009 4th Annual Conference on Empirical Legal Studies Paper; NYU Law and Economics Research Paper No. 09-40. Available at SSRN: https://ssrn.com/abstract=1443256 or http://dx.doi.org/10.2139/ssrn.1443256

Yannis Bakos

New York University (NYU) - Department of Information, Operations, and Management Sciences ( email )

44 West Fourth Street
New York, NY 10012
United States
212-998-0841 (Phone)

HOME PAGE: http://www.stern.nyu.edu/~bakos

Florencia Marotta-Wurgler (Contact Author)

New York University School of Law ( email )

40 Washington Square South
New York, NY 10012-1099
United States

HOME PAGE: http://its.law.nyu.edu/facultyprofiles/profile.cfm?personID=27875

David R. Trossen

Knobbe Martens Olson & Bear LLP ( email )

One Sansome Street
Suite 3500
San Francisco, CA 94104
United States

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