Martin Brenncke (Aston Law School, Birmingham) has posted Reconceptualizing Behaviorally Informed Consumer Law and Policy (Loyola Consumer Law Review, Forthcoming) on SSRN. Here is the abstract:
Behaviorally informed consumer law uses empirical evidence about consumer behavior to inform the design and enforcement of effective laws. This legal innovation sits at the heart of current debates about the use of nudging as a regulatory tool and 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 novel 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 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.