Advertising Principles - Evidence-based principles

7.13.1 Do mandatory disclosures help consumers?

A review of the evidence on mandated disclosures covered not only advertising but also areas such as Miranda rights, informed consent, and Institutional Review Boards. Such disclosures may not seem contentious as they simply involve providing more information to those who might find it useful. Surprisingly, then, Ben-Shahar and Schneider (2011) were unable to find a single mandatory disclosure for which the benefits outweighed the costs.

A review of the evidence on mandated disclosures covered not only advertising but also areas such as Miranda rights, informed consent, and Institutional Review Boards. Such disclosures may not seem contentious as they simply involve providing more information to those who might find it useful. Indeed, mandated disclosures are widespread and enormous sums are spent to make them effective. In their wide-ranging review of the evidence presented in court cases and in the social science literature, however, Ben-Shahar and Schneider (2011) found that mandated disclosures seldom provided clear explanations. When consumers do read them—typically they do not—they become confused. In those rare situations when they are not confused, they are unlikely to remember the information, or, if they do, they rarely use it properly. Ben-Shahar and Schneider were unable to find a single mandatory disclosure for which the benefits outweighed the costs. This paper was done completely independently of Green and Armstrong (2012).

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