Behavioural Economics:
Improving Consumer
Policy?
Via Durini n. 27
20122 Milano
Tel. +39 02 778031
Fax +39 02 77803233
http: www.jenny.it
Rossella Incardona
Bruxelles, 28 November 2008
1. BE and Consumer Policy: Pros and Cons
PROS

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A backdrop for judges, authorities, traders and lawyers

Behavioural bias: a tool box for policymakers (e.g. framing effect,
information overload, loss aversion, imperfect self-control, importance of
other people’s behaviour, motivation to do the right thing)

An invitation for consumer organizations to motivate consumers
and raise their awareness

A challenge and a stimulus for economists (of whatever creed)
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1. BE and
Consumer
Policy: Pros
and Cons
CONS

Impairment of the principle of certainty of law

Diminished confidence for traders

Diminished consumer self-awareness and freedom of choice
Behavioural Economics: Improving Consumer Policy?
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2. The Proposal EC Consumer Rights Directive
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 The Proposal EC Consumer Rights Directive: some examples
of existing policy interventions (which seem) already based on
BE insights, e.g. cooling-off periods, disclosure obligations
2. The
Proposal EC
Consumer
Rights
Directive
 Proposals for the Proposal: symbols for withdrawal periods and
EC consumer sale guarantee
 Article 31.3. of the Proposal (additional charges actively
accepted and not subject to default options): some remarks
 The Proposal EC Consumer Rights Directive: why not a
Regulation?
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3. The Average Consumer and the UCPD
 The “average consumer” (i.e. …“reasonably well-informed and
reasonably observant and circumspect , taking into account
social, cultural and linguistic factors…”): too high a standard
for the real consumer?
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 The “vulnerable consumer” (i.e. “the average member of a
clearly identifiable group of consumers who are particularly
vulnerable … because of their mental or physical infirmity, age
or credulity in a way which the trader could reasonably be
expected to foresee”): some criticisms
3. The
Average
Consumer
and the
UCPD
 UCPD: overall benefits, i.e. broad scope, proper balance of
general clauses and fixed rules
 UCPD: the Italian experience (Service providers cases)
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4. Conclusions

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BE insights may help to shape a more effective consumer policy BUT
they cannot offer turnkey solutions
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
YES to non intrusive BE tools in EC consumer policy, e.g. assessing
and proposing consumer policy against a backdrop of BE insights

NO to the impairment of legal certainty, e.g. the notion of the vulnerable
consumer, grey lists

4.
Conclusions
NO to limitations of consumers’ and traders’ freedom of choice, e.g. use
of excessive default options, imposition of mandatory contractual forms

The way forward: more time and resources needed to increase
consumer awareness, make information more effective, detect “bad”
traders, keep on studying BE!
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