IDEAS home Printed from https://ideas.repec.org/a/wly/empleg/v18y2021i2p421-460.html
   My bibliography  Save this article

Do People Like Mandatory Rules? The Choice Between Disclosures, Defaults, and Mandatory Rules in Supplier‐Customer Relationships

Author

Listed:
  • Ori Katz
  • Eyal Zamir

Abstract

In recent years, numerous empirical studies have examined the prevailing attitudes toward nudges, but hardly any have examined the prevailing attitudes toward mandatory rules. To fill this gap, this article describes five studies (N = 3,103)—mostly preregistered studies conducted with representative samples of the U.S. population—which tested people's attitudes toward mandatory rules in contractual settings. We found that in supplier‐customer relationships, people tend to rate mandatory rules as more desirable than disclosure duties and default rules. People's judgments in this regard depend on the relative effectiveness of the various types of rules in protecting customer's interests and their expected impact on the price, but there is considerable support for mandatory rules even if they are only slightly or moderately more effective than the alternatives, and even when they entail some price increase. People tend to believe that mandatory rules in this sphere enhance customers' freedom of contract—which may explain why these judgments are not correlated with people's ideological inclinations (liberal or conservative).

Suggested Citation

  • Ori Katz & Eyal Zamir, 2021. "Do People Like Mandatory Rules? The Choice Between Disclosures, Defaults, and Mandatory Rules in Supplier‐Customer Relationships," Journal of Empirical Legal Studies, John Wiley & Sons, vol. 18(2), pages 421-460, June.
  • Handle: RePEc:wly:empleg:v:18:y:2021:i:2:p:421-460
    DOI: 10.1111/jels.12285
    as

    Download full text from publisher

    File URL: https://doi.org/10.1111/jels.12285
    Download Restriction: no

    File URL: https://libkey.io/10.1111/jels.12285?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Cass R. Sunstein & Richard H. Thaler, 2003. "Libertarian paternalism is not an oxymoron," Conference Series ; [Proceedings], Federal Reserve Bank of Boston, vol. 48(Jun).
    2. Dragos C Petrescu & Gareth J Hollands & Dominique-Laurent Couturier & Yin-Lam Ng & Theresa M Marteau, 2016. "Public Acceptability in the UK and USA of Nudging to Reduce Obesity: The Example of Reducing Sugar-Sweetened Beverages Consumption," PLOS ONE, Public Library of Science, vol. 11(6), pages 1-18, June.
    3. Richard H. Thaler & Cass R. Sunstein, 2023. "Libertarian paternalism," Chapters, in: Cass R. Sunstein & Lucia A. Reisch (ed.), Research Handbook on Nudges and Society, chapter 1, pages 10-16, Edward Elgar Publishing.
    4. Soroka, Stuart N. & Wlezien, Christopher, 2005. "Opinion–Policy Dynamics: Public Preferences and Public Expenditure in the United Kingdom," British Journal of Political Science, Cambridge University Press, vol. 35(4), pages 665-689, October.
    5. Cass R. Sunstein, 2017. "Human Agency and Behavioral Economics," Palgrave Advances in Behavioral Economics, Palgrave Macmillan, number 978-3-319-55807-3, February.
    6. Nosek, Brian A. & Ebersole, Charles R. & DeHaven, Alexander Carl & Mellor, David Thomas, 2018. "The Preregistration Revolution," OSF Preprints 2dxu5, Center for Open Science.
    7. Tikotsky, Ariel & Pe'er, Eyal & Feldman, Yuval, 2020. "Which nudges do businesses like? Managers’ attitudes towards nudges directed at their business or at their customers," Journal of Economic Behavior & Organization, Elsevier, vol. 170(C), pages 43-51.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Clareta Treger, 2023. "When do people accept government paternalism? Theory and experimental evidence," Regulation & Governance, John Wiley & Sons, vol. 17(1), pages 195-214, January.
    2. Mira Fischer & Philipp Lergetporer & Katharina Werner, 2024. "Do Narratives about Psychological Mechanisms Affect Public Support for Behavioral Policies?," Rationality and Competition Discussion Paper Series 505, CRC TRR 190 Rationality and Competition.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Ramzi Mabsout, 2022. "John Stuart Mill, soft paternalist," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 58(1), pages 161-186, January.
    2. Pablo Garcés-Velástegui, 2022. "On behavioral human development policies: how behavioral public policy adds to human development," Revista Desarrollo y Sociedad, Universidad de los Andes,Facultad de Economía, CEDE, vol. 91(5), pages 171-200, July.
    3. Joseph E. Stiglitz, 2017. "The overselling of globalization," Business Economics, Palgrave Macmillan;National Association for Business Economics, vol. 52(3), pages 129-137, July.
    4. Tasoff, Joshua & Letzler, Robert, 2014. "Everyone believes in redemption: Nudges and overoptimism in costly task completion," Journal of Economic Behavior & Organization, Elsevier, vol. 107(PA), pages 107-122.
    5. Ross Guest, 2010. "Policy Forum: Saving for Retirement: Policy Options to Increase Retirement Saving in Australia," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 43(3), pages 293-301, September.
    6. Asen Ivanov, 2021. "Optimal pension plan default policies when employees are biased," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 23(3), pages 583-596, June.
    7. Hitoshi Matsushima, 2018. "Bank Runs and Minimum Reciprocity," CIRJE F-Series CIRJE-F-1099, CIRJE, Faculty of Economics, University of Tokyo.
    8. Schnellenbach, Jan, 2012. "Nudges and norms: On the political economy of soft paternalism," European Journal of Political Economy, Elsevier, vol. 28(2), pages 266-277.
    9. Scott Duke Kominers & Alexander Teytelboym & Vincent P Crawford, 2017. "An invitation to market design," Oxford Review of Economic Policy, Oxford University Press and Oxford Review of Economic Policy Limited, vol. 33(4), pages 541-571.
    10. Blomquist, Soren & Micheletto, Luca, 2006. "Optimal redistributive taxation when government's and agents' preferences differ," Journal of Public Economics, Elsevier, vol. 90(6-7), pages 1215-1233, August.
    11. Claus Dierksmeier, 2018. "Qualitative Freedom and Cosmopolitan Responsibility," Humanistic Management Journal, Springer, vol. 2(2), pages 109-123, February.
    12. Nicole D. Sintov & P. Wesley Schultz, 2017. "Adjustable Green Defaults Can Help Make Smart Homes More Sustainable," Sustainability, MDPI, vol. 9(4), pages 1-12, April.
    13. Ajla Cosic & Hana Cosic & Sebastian Ille, 2018. "Can nudges affect students' green behaviour? A field experiment," Journal of Behavioral Economics for Policy, Society for the Advancement of Behavioral Economics (SABE), vol. 2(1), pages 107-111, March.
    14. Till Grüne-Yanoff, 2012. "Old wine in new casks: libertarian paternalism still violates liberal principles," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 38(4), pages 635-645, April.
    15. Christopher Jeffords, 2014. "Preference-directed regulation when ethical environmental policy choices are formed with limited information," Empirical Economics, Springer, vol. 46(2), pages 573-606, March.
    16. Cristiano Codagnone & Giuseppe Alessandro Veltri & Francesco Bogliacino & Francisco Lupiáñez-Villanueva & George Gaskell & Andriy Ivchenko & Pietro Ortoleva & Francesco Mureddu, 2016. "Labels as nudges? An experimental study of car eco-labels," Economia Politica: Journal of Analytical and Institutional Economics, Springer;Fondazione Edison, vol. 33(3), pages 403-432, December.
    17. Markus Haavio & Kaisa Kotakorpi, 2012. "Sin Licenses Revisited," CESifo Working Paper Series 4010, CESifo.
    18. Schnellenbach, Jan & Schubert, Christian, 2015. "Behavioral political economy: A survey," European Journal of Political Economy, Elsevier, vol. 40(PB), pages 395-417.
    19. Dohmen, Thomas & Falk, Armin & Huffman, David & Marklein, Felix & Sunde, Uwe, 2009. "Biased probability judgment: Evidence of incidence and relationship to economic outcomes from a representative sample," Journal of Economic Behavior & Organization, Elsevier, vol. 72(3), pages 903-915, December.
    20. van Dalen, Hendrik Peter & Henkens, Kene, 2018. "Do people really want freedom of choice? : Assessing preferences of pension holders," Other publications TiSEM 448e8a93-9ded-401f-9da0-7, Tilburg University, School of Economics and Management.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wly:empleg:v:18:y:2021:i:2:p:421-460. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: https://doi.org/10.1111/(ISSN)1740-1461 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.