Does Contract Disclosure Matter?

Florencia Marotta-Wurgler ()

Journal of Institutional and Theoretical Economics (JITE), 2012, vol. 168, issue 1, 94-119

Abstract: Disclosure has long been the preferred regulatory approach to prevent one-sided standard-form contract terms, but its efficacy is unclear. For disclosure to be effective, it must increase readership of contracts and, conditional on reading, affect decisions. I use clickstream data on software shoppers to test these two conditions in the online context. I find that the prominence of disclosure of a software license agreement has little effect on readership. Moreover, those who read the license are equally likely to purchase the product regardless of its one-sidedness. Mandatory online disclosure regimes thus seem unlikely to impose competitive pressure on sellers.

JEL-codes: K12 (search for similar items in EconPapers)
Date: 2012
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Citations: View citations in EconPapers (7)

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