University of Michigan Legal Working Paper Series
Program in Law and Economics
The Failure of Mandated Disclosure
Abstract
This article explores the spectacular prevalence, and failure, of the single most common technique for protecting personal autonomy in modern society: mandated disclosure. The article has four sections:
(1) A comprehensive summary of the recurring use of mandated disclosures, in many forms and circumstances, in the areas of consumer and borrower protection, patient informed consent, contract formation, and constitutional rights;
(2) A survey of the empirical literature documenting the failure of the mandated disclosure regime in informing people and in improving their decisions;
(3) An account of the multitude of reasons mandated disclosures fail, focusing on the political dynamics underlying the enactments of these mandates, the incentives of disclosers to carry them out, and, most importantly, on the ability of disclosees to use them;
(4) An argument that mandated disclosure not only fails to achieve its stated goal but also leads to unintended consequences that often harm the very people it intends to serve.
Subject Area
Law and Economics
Recommended Citation
Omri Ben-Shahar and Carl E. Schneider,
"The Failure of Mandated Disclosure"
(March 2010).
University of Michigan Legal Working Paper Series.
Program in Law and Economics.
Working Paper 9.
http://law.bepress.com/umichlwps/empirical/art9
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