Behavioural Law and Economics: Regulatory Reform of Consumer Credit and Consumer Financial Services

36 Pages Posted: 14 Nov 2014

See all articles by Paul Ali

Paul Ali

University of Melbourne - Law School

Ian Ramsay

Melbourne Law School - University of Melbourne

Cate Read

Melbourne Law School, University of Melbourne

Date Written: November 13, 2014

Abstract

The authors examine the influence of behavioural research upon economic policy-making, as it relates to the regulation of consumer credit and consumer financial services. Using the examples of credit cards in the United States and Australia, and retirement savings' infrastructure in the United States, New Zealand and Australia, we investigate the impact of 'nudging' upon regulation in these areas, and the degree to which such policies are capable of substantive change without the support of mandatory measures and other forms of targeted regulation. We conclude that nudging, alone, is not sufficient to achieve effective regulatory reform, and that other policies recommended by behavioural economics, such as mandatory measures and other forms of targeted regulation, are also required to achieve durable change in consumer behaviour. In light of this conclusion, we suggest that 'nudging' is best viewed as a regulatory supplement, or one of a range of regulatory tools, and that more attention should be focussed on the full range of behavioural law and economics regulatory reform recommendations, especially in the areas covered by this article.

Keywords: behavioural economics, consumer credit, retirement planning, credit cards, consumer financial services

Suggested Citation

Ali, Paul and Ramsay, Ian and Read, Cate, Behavioural Law and Economics: Regulatory Reform of Consumer Credit and Consumer Financial Services (November 13, 2014). Available at SSRN: https://ssrn.com/abstract=2524131 or http://dx.doi.org/10.2139/ssrn.2524131

Paul Ali

University of Melbourne - Law School ( email )

University Square
185 Pelham Street, Carlton
Victoria, Victoria 3010
Australia
+61 3 8344 1088 (Phone)
+61 3 8344 5285 (Fax)

HOME PAGE: http://www.law.unimelb.edu.au

Ian Ramsay (Contact Author)

Melbourne Law School - University of Melbourne ( email )

University Square
185 Pelham Street, Carlton
Victoria, Victoria 3010
Australia
+61 3 8344 5332 (Phone)

HOME PAGE: http://law.unimelb.edu.au/about/staff/ian-ramsay

Cate Read

Melbourne Law School, University of Melbourne ( email )

185 Pelham Street
Carlton, Victoria 3053
Australia

Register to save articles to
your library

Register

Paper statistics

Downloads
224
Abstract Views
1,013
rank
138,671
PlumX Metrics