Document Type

Article

Publication Title

Harvard Journal of Law & Technology

Abstract

This Article studies three central design features of cell-phone service contracts, arguing that rational-choice explanations of these contractual features fall short and that they are better understood as a rational market response to the imperfect rationality of cell-phone users. After verifying the theoretical claims empirically, this Article finds that the identified consumer mistakes and providers’ responses to these mistakes generate substantial welfare costs. As a solution, this Article proposes mandated disclosure of use-pattern information, including average-use and, more importantly, individual-use information that, by directly targeting the identified consumer mistakes, can enhance efficiency and increase consumer surplus in the cellular service market.

First Page

49

Volume

23

Publication Date

2009

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