TMI? Why the Optimal Architecture of Disclosure Remains TBD

Abstract

In their stimulating new book, More Than You Wanted to Know, Omri Ben-Shahar and Carl Schneider provide a compelling account of how we arrived at the current state of ubiquitous ineffective disclosure and a sweeping critique of disclosure as a regulatory technique. But while the book provides an important critique of the traditional approach to mandatory disclosure, it does not fully engage with the burgeoning behavioral literature on disclosure that advocates alternative approaches. To explain the limits of the book’s critique, I begin by reframing the core thesis of the book as an application of dual-process theory from cognitive psychology. Ben-Shahar and Schneider analyze a particular — and undoubtedly prevalent — rationale for disclosure regulation: providing information to improve deliberate decision-making. They convincingly show that this model of disclosure often gets the psychology wrong. This is not, however, disclosure’s only modus operandi. I examine an alternative mode that aims simply to influence rather than instruct. To this approach Ben-Shahar and Schneider’s main critique does not apply. But others do, and I offer several. Finally, I turn to the bottom line. While debunking excessive faith in mandatory disclosure — what they term “disclosurism” — Ben-Shahar and Schneider develop an ism of their own — what we might call “antidisclosurism” — by arguing for total abandonment of, or at least a presumptive bar against, mandatory disclosure. We are better off avoiding all of these isms in our regulatory thinking. The right response to the important critiques of mandatory disclosure that Ben-Shahar and Schneider raise is not a presumption against disclosure but rather rigorous empirical assessment of which disclosures work and which do not with an eye towards the pitfalls the authors document. About disclosure, there is still a great deal more to know.