We are excited to inform you about the JRC Science for Policy report “Front-of-pack nutrition labelling schemes: a comprehensive review”, which provides an update of the former...
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.
- 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.
- Empirical testing of the impact on consumer choice resulting from differences in the composition of seemingly identical branded products (JRC Technical Report, 2020)
- Assessment of voluntary claims on fishery and aquaculture products (Directorate-General Maritime Affairs and Fisheries, 2019)
- Using protection motivation theory in the design of nudges to improve online security behavior (International Journal of Human-Computer Studies, 2019)
- Behavioural study on transparency in online platforms (Directorate-General Justice and Consumers, 2018)
Recognising that advances in behavioural, decision and social sciences demonstrate that we are not purely rational beings, this report brings new insights into our political behaviour...
Consumers' reluctance to consider switching providers is a problem in certain markets for financial products. For example, once people have signed a mortgage, they rarely re-check...