The Futility of Cost Benefit Analysis in Financial Disclosure Regulation

21 Pages Posted: 23 Mar 2014 Last revised: 25 Mar 2014

See all articles by Omri Ben-Shahar

Omri Ben-Shahar

University of Chicago Law School

Carl E. Schneider

University of Michigan Law School

Date Written: January 20, 2014


What would happen if cost benefit analysis were applied to disclosure regulations? Mandated disclosure has largely escaped rigorous CBA because it looks so plausible: Disclosure seems rich in benefits and low in cost. This article makes two arguments. First, it previews the thesis in our book More Than You Wanted to Know (Princeton Press, 2014) that disclosure laws do not deliver their anticipated benefits and thus could not easily pass quantified CBA. Second, it describes a previously unrecognized cost of disclosure, one arising from lawmakers’ collective action problem. With the proliferation of disclosures, each new mandate diminishes the attention people can give to other information, including all other disclosures. The problem for CBA is lawmakers’ inability to coordinate disclosure laws across different fields and jurisdictions. The article illustrates this regulatory failure by examining the rigorous cost-effectiveness analysis conducted by the Consumer Financial Protection Bureau in its recent mortgage disclosure regulation.

Suggested Citation

Ben-Shahar, Omri and Schneider, Carl E., The Futility of Cost Benefit Analysis in Financial Disclosure Regulation (January 20, 2014). University of Chicago Coase-Sandor Institute for Law & Economics Research Paper No. 680; U of Michigan Public Law Research Paper No. 395; U of Michigan Law & Econ Research Paper No. 14-008. Available at SSRN: or

Omri Ben-Shahar (Contact Author)

University of Chicago Law School ( email )

1111 E. 60th St.
Chicago, IL 60637
United States

Carl E. Schneider

University of Michigan Law School ( email )

625 South State Street
Ann Arbor, MI 48109-1215
United States
734-647-4170 (Phone)

Register to save articles to
your library


Paper statistics

Abstract Views
PlumX Metrics

Under construction: SSRN citations will be offline until July when we will launch a brand new and improved citations service, check here for more details.

For more information