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In a number of prominent legal programs, institutional design of the underlying processes allows speakers to shift the costs of processing their message to ill-equipped audiences. Such a design is unstable and leads to incomprehensible communications and failed legal goals. This final chapter discusses the social consequences of these institutional design problems and offers general recommendations for reform.
A building body of evidence reveals that the Patent and Trademark Office (PTO) is granting a significant number of invalid patents that create inefficiencies and chill innovation. At least part of the blame can be placed on the design of the patent system, which places most of the costs associated with understanding the nature and novelty of a claim on the government patent examiner, rather than on the inventor. After considering how a range of inventors might react to this incentive system, we consider reforms that place stronger incentives on the inventor to justify a patent award.
Consumer protection law is notoriously imbalanced with respect to the superior ability of sellers to process information as compared to their customers. Yet despite the resulting comprehension asymmetries, the design of consumer contract law and disclosure requirements regularly fail to encourage sellers to communicate meaningfully with the target audience. This chapter explores how consumer protection law tacitly encourages incomprehensibility and proposes reforms which would provide increased incentives for meaningful communication between buyers and sellers.
In a number of prominent legal programs, institutional design of the underlying processes allows speakers to shift the costs of processing their message to ill-equipped audiences. Such a design is unstable and leads to incomprehensible communications and failed legal goals. This final chapter discusses the social consequences of these institutional design problems and offers general recommendations for reform.
Some federal legislation is unambiguously incomprehensible, even to the lawmakers sponsoring the bills. Yet this legislation passes through both houses of Congress anyway. Part of the reason involves the benefits of legislative incomprehensibility; if hardly anyone understands what a bill means or how it might work, the bill may actually be able to pass more easily since it is hard to identify substantive flaws. Party leaders who are under pressure to pass some legislation can strongarm rank-and-file members to toe the party line and vote in favor. This chapter identifies the significance of this incomprehensible law problem and closes by offering preliminary suggestions for reform.
Ignorance about chemical risks has been a signature feature of U.S. chemical regulation for nearly half a century. One of the primary reasons for this comes from our regulatory design, which fails to place responsibility on chemical manufacturers to understand and clearly communicate the risks of their chemical products. Instead, this burden is placed on time- and resource-strapped regulators and consumers. To make matters worse, manufacturers face substantial tort liabilities that further discourage them from rigorously assessing the risks of their chemical products, particularly if those assessments have a chance of revealing potential harms. The chapter closes with proposals for reform.
This final orientation chapter in Part I explores how a legal system that fails to account for comprehension asymmetries can exacerbate preexisting impediments to cooperative communication. After identifying those legal settings where comprehension asymmetries are likely to be most severe, the chapter concludes by suggesting general reforms that strengthen the speakers' incentives to communicate cooperatively with their audience.
Nobel prize-winning economist Herbert Simon warned more than 70 years ago that if we did not find a way to manage the flood of information that threatens to overwhelm us, we would find ourselves unable to make sense of it. This short introductory chapter explores the various ways that legal architects have failed to heed Simon's warning in legal areas as diverse as consumer protection, financial regulation, patents, chemical control, and administrative and legislative process. A number of significant legal programs in the U.S. are designed to facilitate the sharing of complete information, yet these programs often neglect to ensure that the information is also comprehensible to the target audience.
This chapter explores "comprehension asymmetries," which occur when speakers have a greater ability to understand or process information relative to their target audiences. By synthesizing work from economics, communications theory, and information theory, we offer a simple conceptual model for understanding and locating comprehension asymmetries in legal programs.
In financial regulation, regulated entities are required to prepare disclosures that detail the risks of their transactions. However, these regulatory requirements sometimes neglect to ensure that financial entities have strong incentives to understand the risks themselves, much less ensure the disclosed risks are comprehensible to others. This chapter applies the concept of comprehension asymmetries to financial regulation and uncovers ways that the existing laws and rules tolerate and sometimes exacerbate wilfull ignorance and incomprehensible disclosures. The chapter closes with suggestions for reform.
Nobel prize-winning economist Herbert Simon warned more than 70 years ago that if we did not find a way to manage the flood of information that threatens to overwhelm us, we would find ourselves unable to make sense of it. This short introductory chapter explores the various ways that legal architects have failed to heed Simon's warning in legal areas as diverse as consumer protection, financial regulation, patents, chemical control, and administrative and legislative process. A number of significant legal programs in the U.S. are designed to facilitate the sharing of complete information, yet these programs often neglect to ensure that the information is also comprehensible to the target audience.