Seduction by Contract: Law, Economics and Psychology in Consumer Markets - Introduction

Seduction By Contract: Law, Economics and Psychology in Consumer Markets,  Oxford University Press (2012)

NYU Law and Economics Research Paper No. 12-33

6 Pages Posted: 28 Sep 2012  

Oren Bar-Gill

Harvard Law School

Date Written: September 28, 2012

Abstract

Consumers routinely enter into contracts with providers of goods and services. These contracts are designed by sophisticated sellers to exploit the psychological biases of consumers. They provide short-term benefits, while imposing long-term costs – because consumers are myopic and optimistic. They are excessively complex – because complexity allows sellers to hide the true cost of the product or service from the imperfectly rational consumer. Using both general theory and detailed case studies, this book explains the costs – to consumers and society at large – imposed by seductive contracts, and outlines a promising legal policy solution: Disclosure mandates. Simple, aggregate disclosures can help consumers make better choice. Comprehensive disclosures can facilitate the work of intermediaries, enabling them to better advise consumers. Effective disclosure would expose the seductive nature of consumer contracts and, as a result, reduce sellers’ incentives to write inefficient contracts.

Suggested Citation

Bar-Gill, Oren, Seduction by Contract: Law, Economics and Psychology in Consumer Markets - Introduction (September 28, 2012). Seduction By Contract: Law, Economics and Psychology in Consumer Markets,  Oxford University Press (2012); NYU Law and Economics Research Paper No. 12-33. Available at SSRN: https://ssrn.com/abstract=2153775

Oren Bar-Gill (Contact Author)

Harvard Law School ( email )

1575 Massachusetts
Hauser 406
Cambridge, MA 02138
United States

Paper statistics

Downloads
540
Rank
39,692
Abstract Views
1,838