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How to improve consumers’ understanding of online legal information: insights from a behavioral experiment

Author

Listed:
  • Alexander J. Wulf

    (SRH Berlin University of Applied Sciences)

  • Ognyan Seizov

    (SRH Berlin University of Applied Sciences)

Abstract

Past research has shown that online information notices often fail to inform consumers well, even if transparency-enhancing measures are implemented. However, the studies in question have employed research designs that were restricted to pre-contract conclusion scenarios and ad hoc, text-only attempts to optimize disclosures. While these results point to the general limitations of disclosures, they leave open whether optimizing information notices can be of substantial value to consumers in other settings. Our study tests the effectiveness of multimodal disclosure optimization techniques in both the pre- and post-contract conclusion scenarios. The post-contract conclusion scenario is the situation where a consumer has a dispute with a business. While this setting is not the primary target of disclosure legislation, it is a more realistic instance of the actual use of legal information online. Here the consumer has a real incentive to obtain information about his or her rights and obligations. We show that under these conditions, consumers do in fact read, retain and understand more when the attempt has been made to optimize disclosures.

Suggested Citation

  • Alexander J. Wulf & Ognyan Seizov, 2023. "How to improve consumers’ understanding of online legal information: insights from a behavioral experiment," European Journal of Law and Economics, Springer, vol. 56(3), pages 559-584, December.
    • Handle: RePEc:kap:ejlwec:v:56:y:2023:i:3:d:10.1007_s10657-022-09755-4
    DOI: 10.1007/s10657-022-09755-4
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    References listed on IDEAS

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    1. Yannis Bakos & Florencia Marotta-Wurgler & David R. Trossen, 2014. "Does Anyone Read the Fine Print? Consumer Attention to Standard-Form Contracts," The Journal of Legal Studies, University of Chicago Press, vol. 43(1), pages 1-35.
    2. Alexander Wulf, 2014. "Institutional competition of optional codes in European contract law," European Journal of Law and Economics, Springer, vol. 38(1), pages 139-162, August.
    3. Florencia Marotta-Wurgler, 2012. "Does Contract Disclosure Matter?," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 168(1), pages 94-119, March.
    4. O. Seizov & A. J. Wulf & J. Luzak, 2019. "The Transparent Trap: A Multidisciplinary Perspective on the Design of Transparent Online Disclosures in the EU," Journal of Consumer Policy, Springer, vol. 42(1), pages 149-173, March.
    5. Christine Jolls, 2013. "Product Warnings, Debiasing, and Free Speech: The Case of Tobacco Regulation," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 169(1), pages 53-78, March.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Information disclosure; Terms and conditions; Consumer contract law; Consumer protection; Transparency; Behavioral experiment;
    All these keywords.

    JEL classification:

    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • D18 - Microeconomics - - Household Behavior - - - Consumer Protection
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • K12 - Law and Economics - - Basic Areas of Law - - - Contract Law
    • K20 - Law and Economics - - Regulation and Business Law - - - General

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