ABSTRACT
Behavioral consumer law uses empirical evidence about consumer behavior to inform the design and enforcement of effective laws. This empirically informed law-making sits at the heart of current debates about (i) the use of nudges as a regulatory tool to make consumers better off and (ii) the regulation of design choices on digital platforms that manipulate consumers to purchase goods they do not want. Scholars and policymakers commonly discuss these issues within two paradigms. The first is behavioral law and economics as a frame of analysis. The second is an analysis of consumer biases and their implications 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 behavioral 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 frame of analysis for behavioral consumer law that is grounded in the study of consumer heuristics rather than consumer biases. Applying this frame of analysis, fourth, the Article reconceptualizes the meaning of nudging, debiasing and behavioural exploitation (commercial practices that exploit consumer biases).
Brenncke, Martin, Reconceptualizing Behaviorally Informed Consumer Law and Policy (October 5, 2022), (2022) 34(2) Loyola Consumer Law Review 166-221.
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