Do People Like Mandatory Rules? The Choice between Disclosures, Defaults, and Mandatory Rules in Supplier-Customer Relationships

Journal of Empirical Legal Studies (Forthcoming)

Hebrew University of Jerusalem Legal Research Paper No. 21-15

66 Pages Posted: 29 Mar 2021 Last revised: 18 Jun 2021

See all articles by Ori Katz

Ori Katz

Hebrew University of Jerusalem, School of Law, Students

Eyal Zamir

Hebrew University of Jerusalem - Faculty of Law

Date Written: March 26, 2021

Abstract

In recent years, numerous empirical studies have examined the prevailing attitudes toward nudges, but hardly any have examined the prevailing attitudes toward mandatory rules. To fill this gap, this article describes five studies (N=3,103)—mostly preregistered studies conducted with representative samples of the U.S. population—which tested people’s attitudes toward mandatory rules in contractual settings. We found that in supplier-customer relationships, people tend to rate mandatory rules as more desirable than disclosure duties and default rules. People’s judgments in this regard depend on the relative effectiveness of the various types of rules in protecting customer’s interests and their expected impact on the price; but there is considerable support for mandatory rules even if they are only slightly or moderately more effective than the alternatives, and even when they entail some price increase. People tend to believe that mandatory rules in this sphere enhance customers’ freedom of contract—which may explain why these judgments are not correlated with people’s ideological inclinations (liberal or conservative).

Keywords: Contract law, Consumer law, Mandatory rules, Nudges, Disclosure duties, Default rules, Public opinion

JEL Classification: D04, D12, D18, K12, K20

Suggested Citation

Katz, Ori and Zamir, Eyal, Do People Like Mandatory Rules? The Choice between Disclosures, Defaults, and Mandatory Rules in Supplier-Customer Relationships (March 26, 2021). Journal of Empirical Legal Studies (Forthcoming), Hebrew University of Jerusalem Legal Research Paper No. 21-15, Available at SSRN: https://ssrn.com/abstract=3813824 or http://dx.doi.org/10.2139/ssrn.3813824

Ori Katz

Hebrew University of Jerusalem, School of Law, Students ( email )

Jerusalem
Israel

Eyal Zamir (Contact Author)

Hebrew University of Jerusalem - Faculty of Law ( email )

Mount Scopus
Mount Scopus, IL 91905
Israel
+972 2 582 3845 (Phone)
+972 2 582 9002 (Fax)

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