Reconceptualizing Behaviorally Informed Consumer Law and Policy

Abstract

Behaviorally informed consumer law and policy uses empirical evidence about consumer behavior to inform the design and enforcement of effective laws and policy. This legal innovation sits at the heart of current debates about (1) the use of nudging as a regulatory tool to make consumers better off, (2) the appropriate regulation of personalized online advertising that exploits consumer weaknesses and vulnerabilities, and (3) the regulation of design choices on digital platforms that manipulate consumers to purchase goods and services they do not want or reveal personal information they would prefer not to disclose. Scholars and policymakers commonly discuss these issues within two paradigms: Behavioral law and economics as an approach to legal analysis and the implications of human biases for law and policy. This Article advances novel critiques of both paradigms and develops alternatives. First, it demonstrates that behavioral law and economics is not an appropriate approach to legal analysis under conditions of true uncertainty and computational intractability, which are common in the real consumer world. Second, the Article shows how two alternative frameworks – ecological rationality theory and autonomy theory – can function as normative foundations for behaviorally informed consumer law and policy. Adopting either one of the alternative frameworks would lead to significant changes (compared to behavioral law and economics) in terms of what consumer biases are, when they occur, how they are caused, and when they warrant regulation. Third, the Article constructs a new theoretical legal perspective against the preoccupation of behavioral law with human biases by highlighting frictions between the concepts of consumer bias and consumer harm. This perspective is further developed into a novel frame of analysis for behaviorally informed consumer law and policy that is grounded in the study of consumer heuristics (mental shortcuts) rather than consumer biases. Applying this new frame of analysis, fourth, the Article reconceptualizes the regulatory contexts of behavioral exploitation (commercial practices that exploit consumer biases) and biased consumer decisions that are the result of a biased mind as well as the regulatory tools of nudging and debiasing. Public policymakers can adopt this new frame of analysis and apply the approach to nudging, debiasing, and regulating behavioral exploitation that is devised in this Article.

Divisions: College of Business and Social Sciences > Aston Law School
College of Business and Social Sciences > Aston Business School
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Publication ISSN: 1530-5449
Last Modified: 04 Jul 2024 07:11
Date Deposited: 07 Nov 2022 12:40
Full Text Link:
Related URLs: https://www.luc ... eview/index.cfm (Publisher URL)
https://papers. ... ract_id=4238596 (Author URL)
https://lawecom ... r/vol34/iss2/1/ (Publisher URL)
PURE Output Type: Article
Published Date: 2023-05-01
Accepted Date: 2022-09-05
Authors: Brenncke, Martin (ORCID Profile 0000-0002-3195-8014)

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