Abstract
This paper discusses how biases and heuristics , e.g. the anchoring effect, affect consumer choices on the energy market. The first part is devoted to analysing the Dyson judgment of the Court of Justice of the European Union, which concerned the EU vacuum cleaner energy label. It is submitted that the Dyson case provides a powerful illustration of how consumers’ choices can be affected by anchoring effect. The paper’s second part discusses, at a more abstract and theoretical level, in what manner biases and heuristics affect consumer choices. In particular, the paper analyses several strategies of categorisation, which are discernible in consumer decision-making.
Access this chapter
Tax calculation will be finalised at checkout
Purchases are for personal use only
Notes
- 1.
Judgment of 11 November 2015 (Case T-544/13), Dyson Ltd. vs. European Commission, ECLI:EU:T:2015:836.
- 2.
OJ 2010 L 153, p. 1.
- 3.
Commission Delegated Regulation (EU) No 665/2013 of 3 May 2013 supplementing Directive 2010/30/EU of the European Parliament and of the Council of 19 May 2010 on the indication by labelling and standard product information of the consumption of energy and other resources by energy-related products, OJ 2013 L 192, p. 1.
- 4.
Dyson Judgment, para. 44.
- 5.
Dyson Judgment, para. 46.
- 6.
Dyson Judgment, para. 47.
- 7.
Dyson Judgment, paras. 49–50.
- 8.
Judgment of 21 July 2011 in Etimine, C-15/10, ECR, EU:C:2011:504, para. 60.
- 9.
Craswell (2006), p. 569.
- 10.
Craswell (2006), p. 583.
- 11.
- 12.
Craswell (2006), p. 584.
- 13.
- 14.
We draw here on the usage by Sunstein (2011), p. 1354.
- 15.
Sunstein (2011), pp. 1354–1355.
- 16.
- 17.
Ben-Shahar and Schneider (2013), pp. 121–125.
- 18.
Ben-Shahar and Schneider (2013), p. 152.
- 19.
Ben-Shahar and Schneider (2013), p. 152.
- 20.
- 21.
- 22.
Ibidem, pp. 1062–1064.
- 23.
Von Neumann and Morgenstern (1944).
- 24.
- 25.
Kahneman (2011), pp. 20–24.
- 26.
Gigerenzer (2007).
- 27.
- 28.
- 29.
Ibidem, pp. 3–38.
- 30.
Sloman (2002), pp. 379 et seq.
- 31.
Glöckner and Betsch (2008), pp. 215–228.
- 32.
Posner explains that: “People are not omniscient, but incompletely informed decisions are rational when the costs of acquiring more information exceed the likely benefits in being able to make a better decision. A fully informed decision in such circumstances-the sort of thing a person makes who cannot prioritize his tasks-would be irrational”, Posner (1992), p. 19.
- 33.
Korobkin and Ulen (2000), pp. 1070–1074.
- 34.
Sunstein (2005), pp. 531–573.
- 35.
Evans J (2008).
- 36.
Estes (1994).
- 37.
Golecki et al. (2016), pp. 290–294.
- 38.
- 39.
References
Alexy R (1989) A theory of legal argumentation. The theory of rational discourse as theory of legal justification. Oxford University Press, Oxford
Ben-Shahar O, Schneider CE (2014) More than you wanted to know. The failure of mandated disclosure. Princeton University Press, Princeton
Christine J, Sunstein Cass R, Thaler R (1998) A behavioral approach to law and economics. Stanford Law Rev 50:1471–1546
Craswell R (2006) Taking information seriously: misrepresentation and nondisclosure in contract law and elsewhere. Va Law Rev 92:565–632
Estes WK (1994) Classification and cognition. Oxford University Press, New York
Evans J (2008) Dual-processing accounts of reasoning, judgment, and social cognition. Annu Rev Psychol 59:255–278
Gabaix X, Laibson D (2006) Shrouded attributes, consumer myopia, and information suppression in competitive markets. Q J Econ 121:505–540
Gigerenzer G (2007) Gut feelings: the intelligence of the unconscious. New York
Glöckner A, Betsch T (2008) Modeling option and strategy choices with connectionist networks: towards an integrative model of automatic and deliberate decision making. Judgm Decis Mak 3:215–228
Golecki MJ, Romanowicz M, Wojciechowski J (2016) Nudging in tax law? Eyetracking research on limits of efficacy of legal definitions. In: Mathis K, Tor A (eds) Nudging – possibilities, limitations and applications in European law and economics. Springer, Cham, pp 289–313
Guthrie C, Rachlinski JJ, Wistrich AJ (2000) Inside the judicial mind. Cornell Law Rev 86:777–892
Guthrie C, Rachlinski JJ, Wistrich AJ (2007) Blinking on the bench: how judges decide cases. Cornell Law Rev 93:1–43
Guttel E, Harel A (2008) Uncertainty revisited: legal prediction and legal postdiction. Mich Law Rev 107:467–499
Kahneman D (2003) A perspective on judgment and choice. Mapping bounded rationality. Am Psychol 58:697–720
Kahneman D (2011) Thinking, fast and slow. Macmillan, London
Kahneman D, Tversky A (1979) Prospect theory: an analysis of decision under risk. Econometrica 47:263–293
Korobkin RB, Ulen TS (2000) Law and behavioral science: removing the rationality assumption from law and economics. Calif Law Rev 88:1051–1144
Nosofsky RM (1986) Attention, similarity, and the identification-categorization relationship. J Exp Psychol Gen 115:39–57
Nosofsky RM, Palmeri TJ, McKinley SC (1994) Rule-plus-exception model of classification learning. Psychol Rev 101:53–79
Posner R (1992) Economic analysis of law, 4th edn. Little Brown and Co., New York
Preston IL, Richard JI (1986) Consumer miscomprehension as a challenge to FTC prosecutions of deceptive advertising. J Marshall Law Rev 19:605–635
Russo E, Metcalf BL, Stephens D (1981) Identifying misleading advertising. J Consum Res 8:119–131
Sloman SA (2002) Two systems of reasoning. In: Gilovich T, Griffin D, Kahneman D (eds) Heuristics and biases: the psychology of intuitive judgment. Cambridge University Press, New York, pp 379–396
Smith EE, Sloman SA (1994) Similarity- versus rule-based categorization. Mem Cogn 22:377–386
Smith EE, Patalano AL, Jonides J (1998) Alternative strategies of categorization. Mem Cogn 65:167–196
Sunstein CR (ed) (2000) Behavioral law and economics. Cambridge University Press, Cambridge
Sunstein CR (2005) Moral heuristics. Behav Brain Sci 28:531–573
Sunstein CR (2011) Empirically informed regulation. Univ Chicago Law Rev 28:1349–1429
Sunstein CR, Thaler R (2009) Nudge: improving decisions about health, wealth, and happiness. Penguin, London
Tereszkiewicz P (2016) Neutral third-party counselling as nudge toward safer financial products? The case of risky mortgage loan contracts. In: Mathis K, Tor A (eds) Nudging – possibilities, limitations and applications in European law and economics. Springer, Cham, pp 169–196
Tversky A, Kahneman D (1973) Availability: a heuristic for judging frequency and probability. Cogn Psychol 5(2):207–232
von Neumann J, Morgenstern O (1944) The theory of games and economic behavior. Princeton University Press, Princeton
Acknowledgments
The paper has been prepared within the framework of the research project 2015/17/HS5/00495 financed by the National Science Centre, Poland.
Author information
Authors and Affiliations
Editor information
Editors and Affiliations
Rights and permissions
Copyright information
© 2018 Springer International Publishing AG, part of Springer Nature
About this chapter
Cite this chapter
Golecki, M.J., Tereszkiewicz, P. (2018). Consumer Protection in Energy Markets: Selected Insights from Behavioural Law and Economics and Regulatory Practice. In: Mathis, K., Huber, B. (eds) Energy Law and Economics. Economic Analysis of Law in European Legal Scholarship, vol 5. Springer, Cham. https://doi.org/10.1007/978-3-319-74636-4_13
Download citation
DOI: https://doi.org/10.1007/978-3-319-74636-4_13
Published:
Publisher Name: Springer, Cham
Print ISBN: 978-3-319-74635-7
Online ISBN: 978-3-319-74636-4
eBook Packages: Law and CriminologyLaw and Criminology (R0)