Theory of the Nudnik: The Future of Consumer Activism and What We Can Do to Stop it

59 Pages Posted: 31 Dec 2019 Last revised: 18 May 2020

See all articles by Yonathan A. Arbel

Yonathan A. Arbel

University of Alabama - School of Law

Roy Shapira

Stigler Center, University of Chicago Booth School of Business; Interdiscplinary Center (IDC)

Date Written: December 9, 2019

Abstract

How do consumers hold sellers accountable and enforce market norms? This Article contributes to our understanding of consumer markets in three ways. First, The Article identifies the role of a small subset of consumers — the titular ‘nudniks’ — as engines of market discipline. Nudniks are those who call to complain, speak with managers, post online reviews, and file lawsuits. Typified by an idiosyncratic utility function and personality traits, nudniks pursue action where most consumers remain passive. Although derided in courtrooms and the court of public opinion, we show that nudniks can solve consumer collective action problems, thereby leading to broad market improvements.

Second, the Article spotlights a disconcerting development: Sellers’ growing usage of Big Data and predictive analytics allows them to identify specific consumers as potential nudniks and avoid selling to or disarm them before they can draw attention to sellers’ misconduct. The Article therefore captures an understudied problem with Big Data tools: sellers can use these tools to shield themselves from market accountability.

Finally, the Article evaluates a menu of legal strategies that would preserve the benefits of nudnik-based activism in light of these technological developments. In the process, we revisit the conventional wisdom on the desirability of form contracts, mandatory arbitration clauses, defamation law, and standing doctrines.

Keywords: consumer law, contracts, consumer protection, big data, law & technology, reputation, private ordering, consumer reviews, personalized contracts

JEL Classification: K00, K12, D11, D18, L14, L15, D83

Suggested Citation

Arbel, Yonathan A. and Shapira, Roy, Theory of the Nudnik: The Future of Consumer Activism and What We Can Do to Stop it (December 9, 2019). 73 Vanderbilt Law Review 929 (2020), U of Alabama Legal Studies Research Paper No. 3501175, Available at SSRN: https://ssrn.com/abstract=3501175

Yonathan A. Arbel (Contact Author)

University of Alabama - School of Law ( email )

P.O. Box 870382
Tuscaloosa, AL 35487
United States

Roy Shapira

Stigler Center, University of Chicago Booth School of Business ( email )

Walker Hall
Chicago, IL 60637
United States

Interdiscplinary Center (IDC) ( email )

P.O. Box 167
Herzliya, 46150
Israel
972-9-9602410 (Phone)
972-9-9527996 (Fax)

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
373
Abstract Views
2,760
rank
89,026
PlumX Metrics