Disclosure for real humans

Abstract

Modern consumers typically face complex goods and services. In the interest of customer protection, these companies are asked to disclose information about the products and consumers are typically required to indicate their understanding of the information provided. In truth, consumers seldom consult, even less understand the information provided. I present here the state of evidence about how commercial disclosure actually works (or rather does not work) with consumers characterized with human limitations in information processing. I discuss ways to improve disclosure regulation to improve customer protection.