Why Judicial Control of Price Terms in Consumer Contracts Might Not Always be the Right Answer - Insights from Behavioural Law and Economics

Regulators everywhere are confronted with the question of how to react to contractual pricing structures that serve to hide rather than reveal the real cost of goods and services and thereby abuse limitations in the cognitive competences of consumers. Given that sellers/service providers systematically make use of insights from behavioural sciences to refine their manipulative pricing techniques, regulators should also integrate scientific findings on human decision making to correct behavioural market failures through more tailored policy choices. A holistic approach regarding similar problems is still missing in the EU and the issue is often disguised behind a discussion on unfair terms control, which does not serve the purpose of finding a lasting solution. The aim of the presented paper is twofold: first, to show the weaknesses of an ex post judicial control of pricing techniques, and second, to discuss policy tools which could counterbalance consumer biases on which the techniques rely.

A sandwich lunch will be available from 12.30.