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Energy Law and Economics pp 253–271Cite as

Consumer Protection in Energy Markets: Selected Insights from Behavioural Law and Economics and Regulatory Practice

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Part of the book series: Economic Analysis of Law in European Legal Scholarship ((EALELS,volume 5))

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.

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Notes

  1. 1.

    Judgment of 11 November 2015 (Case T-544/13), Dyson Ltd. vs. European Commission, ECLI:EU:T:2015:836.

  2. 2.

    OJ 2010 L 153, p. 1.

  3. 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. 4.

    Dyson Judgment, para. 44.

  5. 5.

    Dyson Judgment, para. 46.

  6. 6.

    Dyson Judgment, para. 47.

  7. 7.

    Dyson Judgment, paras. 49–50.

  8. 8.

    Judgment of 21 July 2011 in Etimine, C-15/10, ECR, EU:C:2011:504, para. 60.

  9. 9.

    Craswell (2006), p. 569.

  10. 10.

    Craswell (2006), p. 583.

  11. 11.

    For examples where no such effect was established in the context of specific disclosures, see Russo et al. (1981), pp. 124–125; Preston and Richard (1986), pp. 608–609.

  12. 12.

    Craswell (2006), p. 584.

  13. 13.

    Tversky and Kahneman (1973), p. 257; Sunstein (2011), p. 1353.

  14. 14.

    We draw here on the usage by Sunstein (2011), p. 1354.

  15. 15.

    Sunstein (2011), pp. 1354–1355.

  16. 16.

    Gabaix and Laibson (2006); Sunstein (2011), p. 1355.

  17. 17.

    Ben-Shahar and Schneider (2013), pp. 121–125.

  18. 18.

    Ben-Shahar and Schneider (2013), p. 152.

  19. 19.

    Ben-Shahar and Schneider (2013), p. 152.

  20. 20.

    Cf. the contrasting views of Sunstein (2011), pp. 1353–1369; Ben-Shahar and Schneider (2014), pp. 121–137.

  21. 21.

    Alexy (1989), pp. 212–287; Korobkin and Ulen (2000), pp. 1060–1066; Guthrie et al. (2000); Guthrie et al. (2007); Christine et al. (1998).

  22. 22.

    Ibidem, pp. 1062–1064.

  23. 23.

    Von Neumann and Morgenstern (1944).

  24. 24.

    Korobkin and Ulen (2000), pp. 1075–1102; Kahneman (2003), pp. 697–700.

  25. 25.

    Kahneman (2011), pp. 20–24.

  26. 26.

    Gigerenzer (2007).

  27. 27.

    Sunstein (2000); Guthrie et al. (2000); Guthrie et al. (2007); Sunstein and Thaler (2009); Tereszkiewicz (2016).

  28. 28.

    Kahneman and Tversky (1979), pp. 263–293; Guttel and Harel (2008), pp. 467–499; Kahneman (2011), pp. 278–288.

  29. 29.

    Ibidem, pp. 3–38.

  30. 30.

    Sloman (2002), pp. 379 et seq.

  31. 31.

    Glöckner and Betsch (2008), pp. 215–228.

  32. 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. 33.

    Korobkin and Ulen (2000), pp. 1070–1074.

  34. 34.

    Sunstein (2005), pp. 531–573.

  35. 35.

    Evans J (2008).

  36. 36.

    Estes (1994).

  37. 37.

    Golecki et al. (2016), pp. 290–294.

  38. 38.

    Nosofsky (1986), pp. 39–57; Nosofsky et al. (1994), pp. 53–79.

  39. 39.

    Smith and Sloman (1994), pp. 377–386; Smith et al. (1998), pp. 167–196.

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Acknowledgments

The paper has been prepared within the framework of the research project 2015/17/HS5/00495 financed by the National Science Centre, Poland.

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Authors and Affiliations

  1. Department of Legal Theory and Philosophy of Law, Faculty of Law and Administration, University of Łódź, Łódź, Poland

    Mariusz J. Golecki

  2. Faculty of Law and Administration, Jagiellonian University of Cracow, Cracow, Poland

    Piotr Tereszkiewicz

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Editors and Affiliations

  1. Faculty of Law, University of Lucerne, Lucerne, Switzerland

    Klaus Mathis

  2. University of Notre Dame Law School , Notre Dame, Indiana, USA

    Bruce R. Huber

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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

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