Prof. Giuseppe Dari Mattiacci (University of Amsterdam)
This paper presentation on 'Learning in Standard Form Contracts: Theory and Evidence' is part of the Centre for the Study of European Contract Law seminar series.
We explore learning and change in standard form contracts. We hypothesize that drafters (sellers) are more likely to revise the terms they offer when they have an opportunity to learn about their value. These opportunities arise only for those types of terms that allow drafters to experience the relative costs and benefits of offering them. Consider a warranty. Sellers offering a warranty in an initial period will be exposed to claims about malfunction by purchasers and will learn whether it is desirable to offer it going forward. When drafters are unable to learn, either because they fail to offer such learning-enabling terms initially, or because the term in question is one where there is no increased opportunity to learn, we expect that such terms will be revised less frequently. Indeed, a reduced opportunity to learn might create contractual ‘black holes’, where terms that are less likely to be revised might lose their meaning over time or appear less related to the rest of the contract. Our results support this hypothesis. Using a large sample of changes in consumer standard form contracts over a period of seven years, we find that sellers are more likely to revise terms that offer an opportunity to learn than those that do not. The results suggest that standard form contract terms evolve over time as sellers learn about their benefits, costs, and risks. Our results have normative implications for the design of default rules.
Giuseppe Dari-Mattiacci is professor of law and professor of economics (by curtesy) at the University of Amsterdam. He is a fellow of the Tinbergen Institute, a co-editor of the International Review of Law & Economics, a board member of the American Law & Economics Association and of the Italian Society of Law & Economics, and the president of the European Association of Law & Economics.
He has received several prizes and grants, including the VIDI grant from the Netherlands Organization for Scientific Research (VIDI NWO 2007-2012), the Digging into Data grant from the Netherlands Organization for Scientific Research and the National Science Foundation (DiD NWO & NSF 2014-2015) and the ALEA prize for the most outstanding paper published in the American Law & Economics Review in 2014.
Professor Dari-Mattiacci has published numerous articles on the law and economics of torts, property, litigation, and lawmaking in various journals including the University of Chicago Law Review, the Journal of Legal Studies, the Journal of Law, Economics & Organization, the Journal of Law & Economics, and the Journal of Economic History. His recent scholarship focuses on law, economics and history and examines the evolution of legal institutions from ancient Rome to modern times.
His current research projects include the theory and historical emergence of business organizations, the network structure of codes and constitutions, the economics of shareholder lawsuits, standard form and relational contracts, and carrots versus sticks.
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