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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 Jan 2013

“You Want Insurance With That?” Using Behavioral Economics To Protect Consumers From Add-On Insurance Products, Tom Baker, Peter Siegelman

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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 Jan 2005

The Microfoundations Of Standard Form Contracts: Price Discrimination Vs. Behavioral Bias, Jonathan Klick

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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 …


Of Predatory Lending And The Democratization Of Credit: Preserving The Social Safety Net Of Informality In Small-Loan Transactions, Regina Austin Jan 2004

Of Predatory Lending And The Democratization Of Credit: Preserving The Social Safety Net Of Informality In Small-Loan Transactions, Regina Austin

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No abstract provided.


Product Liability And Legal Leverage: The Perverse Effect Of Stiff Penalties, Michael S. Knoll Oct 1997

Product Liability And Legal Leverage: The Perverse Effect Of Stiff Penalties, Michael S. Knoll

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No abstract provided.