TMI? Why the Optimal Architecture of Disclosure Remains TBD

TMI? WHY THE OPTIMAL ARCHITECTURE OF DISCLOSURE REMAINS TBDMore 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.IntroductionWe 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-Shahar1 and Carl E. Schneider2 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 Nudge3-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 proaches. To 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. …