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Full-Text Articles in Law
Broker-Dealers And Investment Advisers: A Behaviorial-Economics Analysis Of Competing Suggestions For Reform, Polina Demina
Broker-Dealers And Investment Advisers: A Behaviorial-Economics Analysis Of Competing Suggestions For Reform, Polina Demina
Michigan Law Review
For the average investor trying to save for retirement or a child’s college fund, the world of investing has become increasingly complex. These retail investors must turn more frequently to financial intermediaries, such as broker-dealers and investment advisers, to get sound investment advice. Such intermediaries perform different duties for their clients, however. The investment adviser owes his client a fiduciary duty of care and therefore must provide financial advice that is in the client’s best interests, while the broker-dealer must merely provide advice that is suitable to the client’s interests—a lower standard than the fiduciary duty of care. And yet …
Opening Schumer’S Box: The Empirical Foundations Of Modern Consumer Finance Disclosure Law, Hosea H. Harvey
Opening Schumer’S Box: The Empirical Foundations Of Modern Consumer Finance Disclosure Law, Hosea H. Harvey
University of Michigan Journal of Law Reform
This Article explores the fundamental failure of Congress’ twenty-five-year quest to utilize disclosure as the primary tool to both regulate credit card issuers and educate consumers. From inception until present, reforms to this disclosure regime, even when premised on judgment and decision-making behavioralism, were nomothetic in orientation and ignored clear differences in population behavior and the heterogeniety of consumers. Current law prohibits credit card issuers from acquiring consumer socio-demographic data and prevents issuers and regulators from using market and policy experimentation to enhance disclosure’s efficacy. To explain why this regime was structured this way and why it must change, this …
Rationality's Reach, Adam B. Badawi
Rationality's Reach, Adam B. Badawi
Michigan Law Review
Economic analysis and the rational actor model have dominated contracts scholarship for at least a generation. In the past fifteen years or so, however, a group of behaviorists has challenged the ability of the rational choice model to account for consumer behavior. These behaviorists are not trying to dismantle the entire enterprise. They generally accept the fundamentals of economic analysis but argue that the rational actor model can be improved by incorporating evidence of decisionmaking flaws that people exhibit. Oren Bar-Gill has been one of the foremost and influential proponents of a behaviorist take on contracts, and his recent book, …
Notification Of Data Security Breaches, Paul M. Schwartz, Edward J. Janger
Notification Of Data Security Breaches, Paul M. Schwartz, Edward J. Janger
Michigan Law Review
The law increasingly requires private companies to disclose information for the benefit of consumers. The latest examples of such regulation are state and federal laws that require companies to notify individuals of data security incidents involving their personal information. These laws, proposed in the wake of highly publicized data spills, seek to punish the breached entity and to protect consumers by requiring the entity to notify its customers about the security breach. There are competing approaches, however to how the law is to mandate release of information about data leaks. This Article finds that the current statutes' focus on reputational …
Information Disclosure And Consumer Behavior: An Empirical Evaluation Of Truth-In-Lending, William K. Brandt, George S. Day
Information Disclosure And Consumer Behavior: An Empirical Evaluation Of Truth-In-Lending, William K. Brandt, George S. Day
University of Michigan Journal of Law Reform
This article offers some empirical insight into the debate over the efficacy of disclosure legislation. The primary concern is the effect of the Act on (1) the level of consumer knowledge of interest rates and finance charges; (2) the extent of comparison shopping; and (3) the decisions to postpone purchases, to use cash instead of credit, or to reduce the finance charges by increasing the downpayment or reducing the number of payments. The article also evaluates patterns of consumer behavior and credit-granting procedures which may constrain the long-run potential of TIL.