Behavioural Economics, Consumer Policy, and Consumer Law - An International and Interdisciplinary Symposium

24 – 26 June 2010
European University Institute, Florence, Italy

Symposium & Call for Papers


Why this symposium?

European consumer policy - and with it: the European Economic Constitution and European consumer law - is based on an assumption of rational acting consumers and suppliers and is deeply rooted in the information paradigm. The information paradigm suggests that there are consumers who are able, willing and competent to deal with information provided, to read different languages, to take informed rational decisions and to enforce their information based rights.

The information paradigm creates obligations upon suppliers to provide relevant information. Nowadays the consumer legal system is full of information duties which tend to produce high costs on the supplier’s side, and which inundate the legal system. The result is an ever growing enforcement deficit. The supplier has difficulties providing all relevant information, and there is significant debate about the value of this information provision in leading to welfare enhancing consumer decisions.

In response to some of the limitations of the rational information processing paradigm there is a growing academic and policy interest in behavioural economics (BE) as an alternative or in some ways complimentary approach to improving the consumer position in the marketplace. BE systematically looks into consumers’ heuristics and biases and herewith into our limitations in decision making. It also investigates the power of defaults and the influence of the environment.

The goal of this symposium is to dig deeper into the discussion on the implications of BE for consumer policy in general and the information paradigm specifically. Driven by the discussion around “Nudge” (Thaler & Sunstein), politicians are looking into “choice architecture” surrounding personal decisions that will cause consumers to choose differently and better.

The symposium will cover a broad range of issues grouped around three themes:


Behavioural economics and the law

  • Are consumer law rules capable of achieving the target they are designed and developed for? Do we need a totally different set of rules which take the behaviour of the consumer into account, a legal system which anticipates and integrates the irrational behaviour of the consumer who is not willing to behave like one should? But is it really rational to read the standard contract terms before booking a flight, or to read the label before buying the product? Will the coherence of the legal system collapse if we take consumers’ “real” behaviour into account?
  • Beyond the more “technical “discussion of how to design better policy tools, we need to discuss the societal dimension of the turning away from a normative design of law to a factual design of law -currently discussed under the heading of “economic sociology of law”.


Information, consumer decision making and behaviour from a socio-economic and social perspective

  • What do we know about the actual decision making at the Point of Sale?
  • What do we know about the role of social contexts in which behaviour takes place?
  • What do we know about the (financial) capability of consumers (consumer confusion; the magical number seven)?
  • What do we know from decision making and information processing as regards different products and services (e.g., pension schemes; financial products; healthy food; eco friendly products and behaviour)?
  • What do we know about the impact of affordability, availability, access?
  • What do we know about group decisions vs. individual decisions?
  • What do we know about “free will” in consumer behaviour?
  • Do we have to rethink our consumer behaviour models when we take BE seriously?
  • Is BE really a superior theoretical approach (vs., e.g., institutional economics; economics of information, neuro-economics)?
  • What are the limitations and pitfalls of BE?What do we know about the impact of social aspects (age, employment status, gender, and educational level) on consumer behaviour in the light of BE?


How can behavioural economics improve consumer policy making?

  • Is there a rational politics for irrational consumers?
  • How can BE inform policy making? How should smarter government instruments for consumer policy be designed based on the knowledge we gain from behavioural economics research? (see “OECD Toolkit”)?
  • How can politics “nudge” consumers into better decisions?
  • What is soft paternalism and where does it make sense? Where are the limits?
  • What do we know about the power of defaults? The role of the context?
  • What areas / which market situations can BE be applied to?


Format

Participation is on invitation only. The group of invitees will be small, around 30.


Publication

As regards publication, we aim for a Journal of Consumer Policy Special Issue and/or for an edited collection (Springer Publ.). Papers based on BE and consumer law as well as on consumer economics and social sciences (politics, psychology, sociology) are welcome. We are looking for both, conceptual and empirical papers with a focus on how BE could potentially inform consumer policy (and the limits). Papers can cover different sectors and markets (e.g., financial services, health services, new welfare markets, ICT, energy) and different countries. Comparative approaches are welcome.

We strive for an interdisciplinary debate and for the development of concrete policy implications rather than (primarily) discussions in disciplinary “silos”. Hence, papers should be written that are not only of disciplinary interest; and of course, directed towards informing and improving consumer policy.

If you are interested in publishing in the special issue on BE and Consumer Policy, you are encouraged to submit an original paper before the 1st October 2010. Further instructions for authors see on the website of the Journal of Consumer Policy.

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