Chapter

The Law, Economics, and Psychology of Consumer Contracts

Bar-Gill Oren

in Seduction by Contract

Published in print August 2012 | ISBN: 9780199663361
Published online September 2012 | e-ISBN: 9780191751660 | DOI: http://dx.doi.org/10.1093/acprof:oso/9780199663361.003.0002
The Law, Economics, and Psychology of Consumer Contracts

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This chapter develops a general approach for analyzing consumer markets and, more specifically, consumer contracts. A behavioural-economics model was used to explain how consumer psychology interacts with market forces to influence the design of consumer contracts. The resulting behavioural market failure entails potentially significant welfare costs, which market solutions can reduce but not eliminate. Optimally designed disclosure mandates, while not a panacea, can enhance efficiency and help consumers.

Keywords: behavioural-economics model; consumer market analysis; consumer bias; welfare costs; disclosure mandates

Chapter.  18612 words.  Illustrated.

Subjects: Company and Commercial Law

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