Friday, February 24, 2017
Developing Behavioural Economics as a Practical Tool for Market Authorities: Lessons learned from the first era of behavioural case work
Benjamin J.R. Nunez has a paper on Developing Behavioural Economics as a Practical Tool for Market Authorities: Lessons learned from the first era of behavioural case work.
ABSTRACT: Market authorities in the UK now have almost a decade of collective experience in interpreting and applying the principles of behavioural economics. Those entities have sought to use insights from the field that show why consumer behaviour sometimes diverges from wealth-maximising predictions as a tool to improve their abilities to diagnose and address problematic market features. This paper reviews the first era of behaviourally-informed case work to derive a series of lessons learned that should inform future applications of the theory. This review begins with a discussion of how authorities have interpreted the findings of behavioural research to be of relevance for their strategic approach to case work. The centrepiece is a survey of recent case work in which the analysis has been driven by the application of behavioural theory. A major lesson that emerges is that behavioural research has facilitated authorities to undertake more nuanced and comprehensive examinations of possible demand-side issues. Currently, however, behavioural theory is not capable of providing robust a priori predictions for the purposes of remedy design; therefore, adequate testing of behavioural remedies is likely to prove crucial for their effectiveness.