01.Smart choices
Consumer welfare is best served when consumers make the choices that promote their interests. But there are many barriers to smart choices: the cost of getting information, exploitation of behavioural biases, unhelpful or misleading advertising, badly designed products and unnecessary complexity. What is the best response by policy makers and information providers in business, government and consumer organisations?
Information is power, isn’t it?
How can consumers get the right information at the right time to make smart choices?
Particular problems include information about services and ‘credence goods’, where marketing claims can’t be tested, even after consumption. But are there opportunities for consumers to get the information they need in new technology or new cultural practices like social networking?
What should we do about behavioural biases, if anything?
Consumers regularly make choices influenced by behavioural biases. Do any of these require changes to consumer policy. Are their practicable responses available?
Are some products and marketing strategies too complex for consumers to deal with?
New technologies and business practices mean products and their marketing are often so complex that valid comparisons can’t be made or the product is poorly understood. Sometimes this means that consumers’ needs can be better met; other times it simply undermines smart choices or adds to costs for businesses as well as consumers. Can we overcome complexity without losing choice?
How do we know if interventions actually work?
How do we measure the success or failure of policies and products that aim to better inform consumers? What does a well informed, savvy consumer look like? How do we know when changes in the market require new approaches?
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