The Death of the Average Consumer at the Crossroads of Law, Economics and Cognitive Sciences: a Tentative Reaction

Consumers’ protection framework traditionally moves from rationalist assumptions. Against this bedrock, economics and cognitive sciences reject the expected utility theory and suggest that the current approach is not adequate to encompass all different elements that affect consumers’ decision-making. This inadequacy can be appreciated from two perspectives: 1) studies on information overload show that correlation between information provided and consumer’s awareness only resists until a certain threshold point. Furthermore, increasing information duties is not useful, since consumers often do not to read contracts at all (“no-reading problem”). 2) prospect theory suggests that decision-making does not rely exclusively on information: consumers are affected by non-rational elements that originate behavioural and cognitive bias (bounded rationality). These traditional deficiencies in consumers’ protection have been intensified by development of the “mass personalization” marketing strategies that characterize the information society: nowadays, it’s possible for firms to individualize their approach to each consumer by availing themselves of all technologies related to e-commerce (data crunching, algorithms, etc.), and subsequently maximize the impact of “non-information elements” on consumers. On the basis of the already existing literature, consumers’ protection must be re-shaped to address their cognitive and behavioural weaknesses, while not losing sight of how remedies must operate in a functional relationship with competition law and markets dynamics. The thesis is developed through two essential phases. - First phase: collecting insights from economic and cognitive researches to find flaws in the current “average consumer” benchmark, and verify the reliability of these data through evidence emerging from case law. Evaluate if the neoclassical approach and prospect theory can co-exist in an economic integrated model and hypothesize the best theoretical approach to build an effectively predictive model for consumer protection. - Second phase: analysing remedies operating before or after the occurrence of commercial practices, and evaluate their effectiveness in addressing practices based on consumers’ irrationality. Ex-ante remedies are those related to command&control strategies, nudging-based approaches or other de-biasing techniques. It is pivotal to develop concrete remedial interventions without major administrative burdens. Ex post remedies’ analysis focuses on assessing the role of already existing remedies. It distinguishes amongst remedies arising from contract law (e.g. annulment of contract for misrepresentation, fraud or mistake), consumers’ law (deceptive commercial practices) or general principles of law(abuse of rights).