Influencing Consumer Behaviour: Improving Regulatory Design Research Paper
Regulation may be necessary for the proper functioning of society and the economy. The aim is to deliver effective and efficient regulation: effective in addressing problems; efficient in maximising net benefits. However, how effective and efficient regulatory interventions are may depend on how successful interventions are in changing people’s behaviour.
This paper analyses two broad approaches in economics to considering consumer behaviour: rational choice theory and behavioural economics. Its purpose is to prompt policy makers to consider alternative approaches in the design of regulation.