Nearly 40% of French consumers feel badly or inadequately protected. This scientific report written in French and made by three members of the Conseil d’Analyse Economique du Premier Ministre (French Prime Minister’s Economic Analysis Council) formulates six propositions to organize a better protection, because this consumers protection is a crucial social issue.
Près de 40% des consommateurs français se sentent mal ou insuffisamment protégés. Le présent rapport scientifique rédigé en français et réalisé par trois membres du Conseil d’Analyse Economique du Premier Ministre formule six propositions pour organiser une meilleure protection, car cette protection des consommateurs est une question sociale cruciale.
Nearly 40% of French consumers feel badly or inadequately protected.
This scientific report written in French and made by three members of the Conseil d’Analyse Economique du Premier Ministre (French Prime Minister’s Economic Analysis Council) formulates six propositions to organize a better protection, because this consumers protection is a crucial social issue.
Before that, the authors review the economic foundations of consumers protection to appreciate the capabilities of the current system and propose measures to improve it.
They argue that the consumer referred to in the books of microeconomics is not the actual consumer.
This is why it is imperative to start from this consumer, whose rationality is limited.In the presence of psycho-cognitive biases , this contribution shows that markets prove unable to protect effectively because information asymmetry is too high, especially in banking or pension contract.
This is why Regulation is necessary, ex ante and ex post.
The authors suggest to :
More precisely, they formulate 6 propositions.
In ex ante, in order to improve the consumers information, they propose the administrative service in charge of the competition controle in the Ministre de l’Economie et des Finances organize a platform of information to permit a comparative information for consumer.
In ex post perspective, the report proposes that, in the bill, this administrative service could pronounce penalty tougher than the project of text said. Last but not least, it advocates the French recognition of class actions.
This report is interesting in that it reminds one truth that we never should lose sight of: the actual consumer is not the one that is described in the works of microeconomics!
Rationality is limited. This is why the market is not enough and that, in many situations, the asymmetry can not be remedied only by the power of the market, let alone the contract.
The market failure are often in the failure of agents and it is in the contracts that the difficulties but also the regulation solutions focus.
This is why the proposals revolving around the idea of organizing an information platform by the administration about "asymmetrical" contractss (banks, pensions, internet, etc..) are good ideas.
Where the reader may be skeptical concerns ex post solutions. This may be an incomplete mastery of the very strong legal dimension of this aspect. Indeed, it seems that the actions that result in fines are not quite well distinguished from actions that result in damages, the difficulty of the hierarchy of norms (the Constitution in the first place) is glossed.
It too bad because this report recommands the adoption of class action strongly and it’s also a legal matter, and a very delicate one. More generally, Law and Regulation are closed, mixed, and it’s difficulted to analyse Regulation only in a legal perspective but also only in an econonic perspective and expertise.