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Protecting buyers from fine print

D'Agostino, Elena; Seidmann, Daniel J.


Elena D'Agostino


Buyers typically do not read the …ne print in contracts, providing an incentive for a monopolist to draft terms which are unfavorable to buyers. We model this problem, proving that trade must then be inefficient. We show that regulation which mandates efficient terms raises welfare. More interestingly, regulations which prohibit the least efficient terms may reduce welfare by inducing the monopolist not to other favorable terms. We extend these results to markets in which some buyers are naive, showing that prohibiting the least efficient terms may also harm the naive buyers.


D'Agostino, E., & Seidmann, D. J. (2016). Protecting buyers from fine print. European Economic Review, 89,

Journal Article Type Article
Acceptance Date May 9, 2016
Online Publication Date May 13, 2016
Publication Date Oct 1, 2016
Deposit Date May 17, 2016
Publicly Available Date May 17, 2016
Journal European Economic Review
Print ISSN 0014-2921
Electronic ISSN 0014-2921
Publisher Elsevier
Peer Reviewed Peer Reviewed
Volume 89
Keywords fine print; regulation
Public URL
Publisher URL


fine print finale.pdf (252 Kb)

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