Does Anyone Read Fine Print? A Test of the Informed Minority Hypothesis Using Clickstream Data

Networks, the Internet, and Cloud Computing

Article Snapshot


Yannis Bakos, Florencia Marotta-Wurgler and David R. Trossen


GMU/Microsoft Conference on the Law & Economics of Innovation, May 8, 2009


This paper asks how often consumers read software licenses.

Policy Relevance

Proposals to protect consumers by adding disclosures to licenses or contracts will probably not work well because few consumers will read the contracts.

Main Points

  • Some argue that a small minority of consumers read the terms of contracts carefully, protecting the remainder who do not from questionable contract terms (the “informed minority” hypothesis).

  • It can be hard to study buyer behavior online, because one must distinguish those serious about buying from casual browsers.

  • Consumers are more likely to read the license agreement when:
    • They visit many pages on the web site during a visit.
    • They suspect there is a “catch” or hidden price in a free product.
    • The software is expensive.
    • The consumer does not need to click many buttons to access the EULA (end user licensing agreement).

  • Consumers are less likely to read the license agreement when:
    • He has started the checkout process, perhaps because they have already decided to buy.
    • The product offers a trial version.

  • This study showed that 99%-99.9% of software buyers do not read the license agreement before buying software. The very small number of consumers who read the contracts are not enough to affect the market.

  • About 30% of software sellers require consumers to click to accept the license agreement before buying.

  • Courts and scholars have said that checking by a few vigilant consumers protects others from questionable contract terms, but there is no evidence this is true for software.

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