Encyclopedia of Law and Economics

2019 Edition
| Editors: Alain Marciano, Giovanni Battista Ramello

Distance Selling and Doorstep Contracts

  • Sven HoeppnerEmail author
Reference work entry
DOI: https://doi.org/10.1007/978-1-4614-7753-2_537

Abstract

Distance-selling and off-premises contracts are two major ways in which consumers and sellers interact. Law and economics research has established that these interactions potentially suffer from market power of sellers, from both ex-ante and ex-post information asymmetries, and from consumer bounded rationality. The most promising tool analysed and advocated by law and economics scholars is a cooling-off period coupled with a right of the consumer to withdraw from the contract. This entry surveys law and economics research on these concerns. Interestingly, relevant questions to this line of research remain, which have been brought to attention mainly by insights from behavioral economics. To exemplify and inspire further research along these lines, this entry discusses potentially perverse incentives created by withdrawal rights and the impact of fairness concerns on the consumer choice to withdraw.

This is a preview of subscription content, log in to check access.

References

  1. Akerlof G (1970) The market for “lemons”: quality uncertainty and the market mechanism. Q J Econ 84:488–500CrossRefGoogle Scholar
  2. Ben-Shahar O, Posner R (2011) The right to withdraw in contract law. J Legal Stud 40:115–148CrossRefGoogle Scholar
  3. Borges G, Irlenbusch B (2007) Fairness crowded out by law: an experimental study on withdrawal rights. J Inst Theor Econ 163:84–101CrossRefGoogle Scholar
  4. Bourgoignie T (1992) Characteristics of consumer law. J Consum Policy 14(3):293–315CrossRefGoogle Scholar
  5. Coricelli G, Critchley HD, Joffily M, O’Doherty JP, Sirigu A, Dolan RJ (2005) Regret and its avoidance: a neuroimaging study of choice behavior. Nat Neurosci 8:1255–1262CrossRefGoogle Scholar
  6. Eidenmüller H (2011) Why withdrawal rights. Eur Rev Contract Law 7:1–24CrossRefGoogle Scholar
  7. Emons W (1989) The theory of warranty contracts. J Econ Surv 3:43–57CrossRefGoogle Scholar
  8. Engel C (2013) Legal experiments: mission impossible? Eleven International Publishing, The HagueGoogle Scholar
  9. Dickie J (1998) Consumer confidence and the EC directive on distance contracts. J Consum Policy 21:217–229CrossRefGoogle Scholar
  10. Falk A, Fischbacher U (2006) A theory of reciprocity. Game Econ Behav 54:293–315CrossRefGoogle Scholar
  11. Fehr E, Gächter S (2000) Fairness and retaliation: the economics of reciprocity. J Econ Perspect 14:159–181CrossRefGoogle Scholar
  12. Frank RH (2008) Microeconomics and behavior, 7th edn. McGraw-Hill, New YorkGoogle Scholar
  13. Frederick S, Loewenstein GF, O’Donoghue T (2002) Time discounting and time preference: a critical review. J Econ Literat 40:351–401CrossRefGoogle Scholar
  14. Gilbert DT, Wilson TD (2007) Prospection: experiencing the future. Science 317:1351–1354CrossRefGoogle Scholar
  15. Goetz CJ, Scott RE (1980) Enforcing promises: an examination of the basis of contract. Yale Law J 89:1261–1322CrossRefGoogle Scholar
  16. Hoeppner S (2012) The unintended consequence of doorstep consumer protection: surprise, reciprocation, and consistency. Eur J Law Econ.  https://doi.org/10.1007/s10657-012-9336-1CrossRefGoogle Scholar
  17. Kahneman D, Knetsch JL, Thaler R (1986) Fairness as a constraint on profit seeking. Am Econ Rev 76:728–741Google Scholar
  18. Kaplow L, Shavell S (1999) The conflict between notions of fairness and the pareto principle. Am Law Econ Rev 1:63–77CrossRefGoogle Scholar
  19. Konow J (2003) Which is the fairest one of all? A positive analysis of justice theories. J Econ Literat 41:1188–1239CrossRefGoogle Scholar
  20. Korobkin R (2003) The endowment effect and legal analysis. Northwest Univ Law Rev 96:1227–1293Google Scholar
  21. Lele MM (2007) Monopoly rules: how to find, capture, and control the world’s most lucrative markets in any business. Kogan Page, LondonGoogle Scholar
  22. Loewenstein GF, O’Donoghue T, Rabin M (2003) Projection bias in predicting future utility. Q J Econ 118:1209–1248CrossRefGoogle Scholar
  23. Loewenstein GF, Schkade D (1999) Wouldn’t it be nice: predicting future feelings. In: Kahneman D, Diener E, Schwartz N (eds) Well-being: the foundations of hedonic psychology. Russel Sage, New York, pp 85–105Google Scholar
  24. Loos M (2009) Rights of withdrawal. In: Howells G, Schulze R (eds) Modernising and harmonising consumer contract law. Sellier, Munich, pp 237–278Google Scholar
  25. Nicolao L, Irvin JR, Goodman JK (2009) Happiness for sale: do experiential purchases make consumers happier than material purchases? J Consum Res 36:188–198CrossRefGoogle Scholar
  26. OFT Market Study on Doorstep Selling (2004) Available at: http://www.oft.gov.uk/OFTwork/markets-work/completed/doorstep-selling. Accessed 16 July 2014
  27. Rekaiti P, Van den Bergh R (2000) Cooling-off periods in the consumer laws of the EC member states: a comparative law and economics approach. J Consum Policy 23:371–407CrossRefGoogle Scholar
  28. Singer J (2008) Normative methods for lawyers. Harvard Law School Public Law Research Paper No. 08–05Google Scholar
  29. Stremitzer A (2012) Opportunistic termination. J Law Econ Org 28:381–406CrossRefGoogle Scholar
  30. Trebilcock MJ (1993) The limits of freedom of contract. Harvard University Press, CambridgeGoogle Scholar
  31. Van Boven L, Gilovich T (2003) To do or to have? That is the question. J Pers Soc Psychol 85:1193–1202CrossRefGoogle Scholar
  32. Weatherill S (2005) EU Consumer Law and Policy. Cheltenham: Edward ElgarCrossRefGoogle Scholar

Copyright information

© Springer Science+Business Media, LLC, part of Springer Nature 2019

Authors and Affiliations

  1. 1.Center for Advanced Studies in Law and Economics (CASLE)Ghent University Law SchoolGhentBelgium
  2. 2.Guest ResearcherMax Planck Institute for Research on Collective GoodsBonnGermany