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Competence Centre on Behavioural Insights

We support policymaking with evidence on human behaviour

Topic / Tool | Last updated: 06 Jun 2024

Behavioural insights for consumer protection

As consumers, we sometimes make decisions too quickly or without integrating all the relevant information. Behavioural insights can help us correct these 'biases'.

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Why behavioural insights matter

As consumers, we are prone to behavioural 'biases' and we frequently use mental 'shortcuts' when we choose products. These factors can lead us to make consumption choices that are not always in our own interest.

Marketing practices sometimes leverage theses biases and shortcuts. For instance:

  • Consumers often fail to consider the long-term costs associated with purchases (this is called 'present bias'). For instance, we sometimes don’t factor in the high interest rates associated with buying a new TV on credit.
  • When booking a hotel room, scarcity messages such as 'last room available at this price' trigger a sense of emergency. This makes some consumers more nervous and impulsive (activating the so-called, 'System 1' thinking mode).
  • Embedding brands in video games leads children to unconsciously transfer their positive attitude toward the games onto the brands (this is called the halo effect).

Understanding these behavioural biases and shortcuts can contribute to more effective and efficient consumer protection policies.

How behavioural insights can help

Behavioural insights help shape better consumer protection policies. For instance:

Default options in online sales

  • Companies selling products online often propose additional products. Think of the travel insurance you are offered when booking a flight ticket.
  • In the past, consumers often had to actively decline these additional products by 'unchecking' the associated 'pre-checked' boxes. Many consumers failed to do this, even though they didn’t want to buy these additional products (this is called the default effect).
  • Acknowledging the existing behavioural evidence on the impact of default options, the Directive on Consumer Rights (2011) (Article 22) requires traders to obtain consumers' explicit and active consent to buy any additional product.

Online gambling

  • A behavioural study carried out in 2012 assessed the impact of different protective measures on the behaviour of people using online gambling services. The study showed that prompting gamblers to commit to a certain monetary or time limit beforehand is effective in decreasing excessive gambling.
  • The European Commission recommendation on online gambling explicitly incorporates the results of this behavioural study. The recommendation advises national governments to introduce measures that help players set such self-commitment strategies.

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