TMI? Why the Optimal Architecture of Disclosure Remains TBD

Ryan Bubb*

More Than You Wanted to Know: The Failure of Mandated Disclosure. By Omri Ben-Shahar and Carl E. Schneider. Princeton and Oxford: Princeton University Press. 2014. Pp. x, 195. $29.95.

We are inundated with disclosures in our daily lives. In one of the more evocative passages in their stimulating new book, More Than You Wanted to Know, Omri Ben-Shahar[1] and Carl E. Schneider[2] imagine a day in the life of someone who actually reads all those disclosures (pp. 95–100). During a commercial on the morning news, the protagonist hits pause on the TiVo to catch the fine print that would otherwise fly by. Breakfast is a slog, requiring close reading of the toaster’s ominous label and the disheartening nutrition facts on the butter and jam. More of the same awaits at the office, where the pop-up announcing a critical software update is accompanied by a lengthy and perplexing end-user license agreement. And so on. The parable vividly illustrates the fanciful nature of the hope that many disclosures will be digested and used in the way their designers intend. Truly reading and trying to comprehend even a modicum of the disclosures we face “would mean a life-time educational project like the worst of high school—boring subjects and nasty tests going on your permanent record” (p. 70).

Ben-Shahar and Schneider provide both a compelling account of how we arrived at the current state of ubiquitous ineffective disclosure and a sweeping critique of disclosure as a regulatory technique. Disclosure is seductive to lawmakers because it seems so plausible that more information is always better and essentially costless to furnish. But the authors survey the evidence and find that disclosure has failed time and again. Its failure is due at root to a misunderstanding of psychology. Disclosure rests on the false assumption that people actually want to make all of the significant decisions in their lives (not to mention the insignificant ones) and to make them with care. In fact most of us are decision averse. And when we do struggle through complex decisions, disclosures typically offer little useful simplification. These problems with disclosure are compounded by its rampant use. Each additional disclosure reduces the attention paid to those that have gone before, leading to overgrazing on the disclosure commons. As a regulatory technique, mandatory “disclosure is a fundamental failure that cannot be fundamentally fixed,” and “what fails should be abandoned” (p. 12).

More Than You Wanted to Know is timely, arriving amid a surge in enthusiasm for light-touch regulatory tools like disclosure that attempt to move choices in the right direction. One influential approach—popularized by the best seller Nudge[3]—dons the mantle of libertarianism, eschewing regulations that would limit freedom of choice in favor of simply redesigning the “choice architecture” through interventions like disclosure to achieve regulatory goals at little cost. The ascendancy of this approach has served to delegitimate choice-limiting policies. If we can achieve so much for so little through harmless tweaks to choice architecture like disclosure, then why ever resort to tools like product regulation that might prohibit someone’s preferred option? What sort of Neanderthal would continue with such outmoded forms of regulation? Ben-Shahar and Schneider provide a refreshing counterpoint to the shift toward “nudging.” Mandating disclosure to improve choice architecture in fact has a long history and a poor track record; the authors explain why.

But while the book provides an important critique of the traditional approach to mandatory disclosure, it does not fully engage with the burgeoning behavioral literature on disclosure that advocates alternative approaches. To explain the limits of the book’s critique, I begin by reframing the core thesis of the book as an application of dual-process theory from cognitive psychology. Ben-Shahar and Schneider analyze a particular—and undoubtedly prevalent—rationale for disclosure regulation: providing information to improve deliberate decisionmaking. They convincingly show that this model of disclosure often gets the psychology wrong. Our effortful deliberate processes are not so easily improved and are often not even engaged as our more intuitive processes predominate.

This is not, however, disclosure’s only modus operandi. I examine an alternative mode that aims simply to influence rather than instruct. This mode of disclosure harnesses our more intuitive processes to move beliefs or behavior in a specific direction. To this approach Ben-Shahar and Schneider’s main critique does not apply. But other critiques do, and I offer several.

Finally, I turn to their normative bottom line. While debunking excessive faith in mandatory disclosure—what they term disclosurism—Ben-Shahar and Schneider develop an ism of their own—what we might call antidisclosurism—by arguing for total abandonment of, or at least a presumptive bar against, mandatory disclosure. But their approach risks making a mistake symmetric to that of the nudge advocates who adopt strong presumptions against any limitation of choice. We are better off avoiding all of these isms in our regulatory thinking. The right response to the important critiques of mandatory disclosure that Ben-Shahar and Schneider raise is not a presumption against disclosure but rather rigorous empirical assessment of which disclosures work and which do not, with an eye toward the pitfalls the authors document. About disclosure, there is still a great deal more to know.

*       Professor of Law, New York University School of Law. Email: For helpful comments and discussions, I am grateful to participants in the faculty workshop at NYU School of Law.

[1].     Leo and Eileen Herzel Professor of Law and Kearney Director of the Coase-Sandor Institute for Law and Economics, University of Chicago Law School.

[2].     Chauncey Stillman Professor of Law, University of Michigan Law School; Professor of Internal Medicine, University of Michigan Medical School.

[3].     Richard H. Thaler & Cass R. Sunstein, Nudge: Improving Decisions About Health, Wealth, and Happiness (Penguin Books rev. ed. 2009) (2008).

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