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Full-Text Articles in Law
“You Want Insurance With That?” Using Behavioral Economics To Protect Consumers From Add-On Insurance Products, Tom Baker, Peter Siegelman
“You Want Insurance With That?” Using Behavioral Economics To Protect Consumers From Add-On Insurance Products, Tom Baker, Peter Siegelman
All Faculty Scholarship
Persistently high profits on “insurance” for small value losses sold as an add-on to other products or services (such as extended warranties sold with consumer electronics, loss damage waivers sold with a car rental, and credit life insurance sold with a loan) pose a twofold challenge to the standard economic analysis of insurance. First, expected utility theory teaches that people should not buy insurance for small value losses. Second, the market should not in the long run permit sellers to charge prices that greatly exceed the cost of providing the insurance. Combining the insights of the Gabaix and Laibson shrouded …
The Microfoundations Of Standard Form Contracts: Price Discrimination Vs. Behavioral Bias, Jonathan Klick
The Microfoundations Of Standard Form Contracts: Price Discrimination Vs. Behavioral Bias, Jonathan Klick
All Faculty Scholarship
Standard form contracts, or contracts of adhesion, appear to provide contradictory evidence for the operation of bargaining in the markets where they are common. Non-negotiated contract terms that seemingly benefit sellers to the detriment of buyers call into question the efficiency implications of the Coase Theorem, which forms the foundation of positive law and economics. Proponents of the behavioral school of law and economics have suggested that behavioral biases, observed in experimental contexts, provide the most plausible explanation for standard form contracts. However, price discrimination might provide a more parsimonious explanation for abusive terms in contracts. If there is heterogeneity …
Small Business And The False Dichotomies Of Contract Law, Larry Garvin
Small Business And The False Dichotomies Of Contract Law, Larry Garvin
The Ohio State University Moritz College of Law Working Paper Series
The article explores the classic consumer- merchant dichotomy from the vantage of small businesses. Using empirical data and the psychology, economics, and management literature, it shows that small businesses, treated like large businesses throughout most of contract and commercial law, in fact behave more like consumers. Small businesses lack the financial strength of large businesses. They generally lack the information gathering ability of large businesses. Finally, they generally are more prey to cognitive errors than are large businesses. As a result, small businesses lose in two ways. When they deal with consumers, they are presumed to have the power, information, …
Introduction To Symposium On Integrating New Economic Learning With Antitrust Doctrine, Jonathan Baker
Introduction To Symposium On Integrating New Economic Learning With Antitrust Doctrine, Jonathan Baker
Articles in Law Reviews & Other Academic Journals
No abstract provided.
Of Predatory Lending And The Democratization Of Credit: Preserving The Social Safety Net Of Informality In Small-Loan Transactions, Regina Austin
Of Predatory Lending And The Democratization Of Credit: Preserving The Social Safety Net Of Informality In Small-Loan Transactions, Regina Austin
All Faculty Scholarship
No abstract provided.
Products Liability And Legal Leverage: The Perverse Effect Of Stiff Penalties, Michael S. Knoll
Products Liability And Legal Leverage: The Perverse Effect Of Stiff Penalties, Michael S. Knoll
All Faculty Scholarship
No abstract provided.