Seduction by contract

In this accessible and well-structured book Bar-Gill takes a close look at the credit card, mortgage, and cell-phone markets. He shows why contracts in these markets look the way they do, what is wrong with them, and what the law can do to help. Providing a dearth of examples Bar-Gill shows in a detailed analysis how in these three markets externalities, asymmetric information, and misperception lead to biased estimates on the part of customers. This analysis provides the basis for an interesting critique of the behavioural assumptions of the contracts in the markets he studies, and a broader critique that the way contracts in these markets function exhibit deficiencies that may well hurt overall social welfare. However, on the basis of the material that he discusses, it may well be argued that the critique he provides is too limited in a number of ways.