|
Archive@NYU >
NET Institute >
NET Institute Working Papers Series >
Please use this identifier to cite or link to this item:
http://hdl.handle.net/2451/29503
|
| Title: | Does Anyone Read the Fine Print? Testing a Law and Economics Approach
toStandard Form Contracts |
| Authors: | Bakos, Yannis - NYU Stern School of Business
Marotta-Wurgler, Florencia - New York University School of Law
Trossen, David R. - Boalt Law School, University of California at Berkeley |
| Issue Date: | 2009 |
| Series/Report no.: | Net Institute Working Paper;09-04 |
| Abstract: | A cornerstone of the law and economics approach to standard form
contracts is the 'informed minority' hypothesis: in competitive markets,
a minority of term-conscious buyers is enough to discipline sellers from
offering unfavorable boilerplate terms. The informed minority argument
is widely invoked to limit intervention in consumer transactions, but
there has been little empirical investigation of its validity. We track
the Internet browsing behavior of 45,091 households with respect to 66
online software companies to study the extent to which potential buyers
access the standard form contract associated with software purchases,
the end user license agreement. We find that only one or two out of
every thousand retail software shoppers chooses to access the license
agreement, and those that do spend too little time, on average, to have
read more than a small portion of the license text. The results cast
doubt on the relevance of the informed minority mechanism in a specific
market where it has been invoked by both theorists and courts and, to
the extent that comparison shopping online is relatively cheap and easy,
suggest limits to the mechanism more generally. |
| URI: | http://hdl.handle.net/2451/29503 |
| Appears in Collections: | NET Institute Working Papers Series
|
All items in Faculty Digital Archive are protected by copyright, with all rights reserved.
|
