NOT MY BROTHERS KEEPER - THE INABILITY OF AN INFORMED MINORITY TO CORRECT FOR IMPERFECT INFORMATION

The problem of imperfect information permeates discussions of both con tract and tort law. Consumers, lacking perfect information, are unable to demand efficient contractual or warranty terms, and so producers c hoose not to provide them. Many scholars, however, have argued that an informed minority can prevent this problem. If a sufficient number of consumers are informed about the efficient terms and demand those ter ms, they argue, producers will respond by providing efficient terms to all consumers. In this Article, the authors examine the informed mino rity argument and the debate that it has generated. In so doing, they develop a formal model of an informed minority within a given marketpl ace. They then assess the conditions necessary for an informed minorit y actually to produce efficient terms for all consumers. Ultimately, t he authors conclude that, although theoretically plausible, an informe d minority in practice cannot be expected to correct for imperfect inf ormation. Market incentives render the existence of a substantial info rmed minority extremely unlikely. Moreover, consumer differences and m arket differentiation ensure that even if such a minority exists, it w ill not produce efficient terms for all consumers.