The author systematically examines one of the important issues of information — establishing the market price. He introduces the concept of «search» — where a buyer wanting to get a better price, is forced to question sellers. The article deals with various aspects of finding the necessary information.

Economics of Information

NUDGE: IMPROVING DECISIONS ABOUT HEALTH, WEALTH, AND HAPPINESS by Richard H. Thaler and Cass R. Sunstein Penguin Books, 2009, 312 pp, ISBN 978-0-14-311526-7This book is best described formally as a general explanation of and advocacy for libertarian paternalism, a term coined by the authors in earlier publications. Informally, it is about how leaders, systems, organizations, and governments can nudge people to do the things the nudgers want and need done for the betterment of the nudgees, or of society. It is paternalism in the sense that "it is legitimate for choice architects to try to influence people's behavior in order to make their lives longer, healthier, and better", (p. 5) It is libertarian in that "people should be free to do what they like - and to opt out of undesirable arrangements if they want to do so", (p. 5) The built-in possibility of opting out or making a different choice preserves freedom of choice even though people's behavior has been influenced by the nature of the presentation of the information or by the structure of the decisionmaking system. I had never heard of libertarian paternalism before reading this book, and I now find it fascinating.Written for a general audience, this book contains mostly social and behavioral science theory and models, but there is considerable discussion of structure and process that has roots in mathematical and quantitative modeling. One of the main applications of this social system is economic choice in investing, selecting and purchasing products and services, systems of taxes, banking (mortgages, borrowing, savings), and retirement systems. Other quantitative social choice systems discussed include environmental effects, health care plans, gambling, and organ donations. Softer issues that are also subject to a nudge-based approach are marriage, education, eating, drinking, smoking, influence, spread of information, and politics. There is something in this book for everyone.The basis for this libertarian paternalism concept is in the social theory called "science of choice", the study of the design and implementation of influence systems on various kinds of people. The terms Econs and Humans, are used to refer to people with either considerable or little rational decision-making talent, respectively. The various libertarian paternalism concepts and systems presented are tested and compared in light of these two types of people. Two foundational issues that this book has in common with another book, Network of Echoes: Imitation, Innovation and Invisible Leaders, that was also reviewed for this issue of the Journal are that 1 ) there are two modes of thinking (or components of the brain) - an automatic (intuitive) process and a reflective (rational) process and 2) the need for conformity and the desire for imitation are powerful forces in human behavior. …

Nudge: Improving Decisions about Health, Wealth, and Happiness

Code and Other Laws of Cyberspace, by Lawrence Lessig, Basic Books, 1999, 230 pages. I. INTRODUCTION Just as Rachel Carson's classic Silent Spring awakened the world to environmental pollution in 1962, Larry Lessig's insightful Code and Other Laws of Cyberspace(1) (Code) seeks to warn longtime inhabitants of cyberspace of a major danger to the wild, unregulated, "1960s-like" environments to which they have grown accustomed. Code challenges the presumption of early Internet heroes, like John Perry Barlow, that technology has created an inherently free environment that can only remain so if governments leave it alone. Code observes, rather, that cyberspace is quite susceptible to alteration and that the gravest threats to online civil liberties in the United States are posed, not by laws, but by computer code--particularly those designed to commercialize the Web for e-commerce. Code explains how the business community's efforts (with government support) to make it easier to confirm cyberspace buyers' identities also unintentionally facilitate regulation of other conduct. Lessig's particular concern is with those civil liberties and other values central to American society, that the framers of the Constitution left without explicit legal protection; the limits of the technology of the time already safeguarded them. Now that the Internet and other new media have eliminated many physical and economic constraints on intrusive conduct-like the tracking of every page that an Internet suffer views--Code pleads for citizens to defend those privacy and other values they consider fundamental, lest they be diminished--if not eliminated--by code. In fact, the introduction of e-commerce-friendly Internet code is somewhat analogous to the genetic engineering of agricultural products. As Europeans--and increasingly Americans--have come to recognize, the manipulation of such basic codes may have widespread effects not limited to their targeted product markets or by national boundaries.(2) This has led many to demand public debate on the issue of what many call "Frankenfoods," and its effects on world ecosystems and human health. While Lessig certainly does not oppose e-commerce code, he advocates collective decision making where code may have major consequences with respect to important societal liberties. From an economist's perspective, Lessig understands that the "externalities" of e-commerce code--in terms of harm to social values--are too significant to expect private sector code writers to design a socially optimal architecture guided solely by Adam Smith's invisible hand. Rather, democratic principles require that, prior to the adoption of important varieties of what he terms "West Coast [computer],"(3) there be public discussions comparable to those associated with the adoption of "East Coast [legal] code."(4) Decisions about how much control over information society wants to allow and by whom, call for democratic decision making. With concerns similar to those of political activist Jeremy Rifkin,(5) Lessig implores citizens not to maintain blind faith in the social value judgments of the commercial marketplace where externalities may be given short shrift, if not ignored altogether, until irreversible harm is done. While Code focuses on issues arising from Internet technology, it also discusses the more general relationship between technology and law. Code observes that four principal forces regulate people's behavior: laws, norms, prices, and technology (although it calls the latter forces "market" and "architecture"). It explains how each of these limit individuals' actions, how the forces can work directly or indirectly in combinations, and how improvements in technology can dramatically alter the composite constraint on people's conduct. The middle third of Code is entirely devoted to identifying how technology--primarily the Internet--is significantly altering the net effect of these four forces on behaviors. …

Code and Other Laws of Cyberspace

This overview article examines the various dimensions of sustainable coffee as well as the actors involved and their perceptions on how to advance the market from niche to mainstream. The issues at hand are very complex, with different types of coffee producers, manufacturing/roasting companies and consumers, and a variety of standards, all with their own peculiarities and views on what is the best approach, and characterised by a divergent potential for ‘scaling up’. Policy-makers, managers and NGOs thus face difficult choices as to which path to pursue as there is no clear consensus on a concrete ‘solution’ to this ‘wicked problem’. The article analyses the market for sustainable coffee, the different types of certified coffee available and their peculiarities considering production and supply perspectives, in relation to consumers who buy the final product. Implications are discussed as well, in the context of complexity and confusion, and the need for more complementarity.

Mainstreaming Sustainable Coffee

This overview article examines the various dimensions of sustainable coffee as well as the actors involved and their perceptions of how to advance the market from niche to mainstream. The issues at hand are very complex, with different types of coffee producers, manufacturing/roasting companies and consumers, and a variety of standards, all with their own peculiarities and views on what is the best approach, and characterized by a divergent potential for ‘scaling up’. Policymakers, managers and NGOs thus face difficult choices as to which path to pursue as there is no clear consensus on a concrete ‘solution’ to this ‘wicked problem’. The article analyses the market for sustainable coffee, the different types of certified coffee available and their peculiarities considering production and supply perspectives, in relation to consumers who buy the final product. Implications are discussed as well, in the context of complexity and confusion, and the need for more complementarity.

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Mainstreaming sustainable coffee

This article deals with the consumer welfare standard in competition law enforcement. It explores the inherent economic and legal 'geography' of this notion by looking beyond the borderlines of competition rules. While the consumer welfare standard has been widely discussed as a legal and economic notion of competition law, this article approaches this concept from a new angle by making use of its interpretation in consumer law. In competition law the primary role of the consumer welfare standard is to verify the goals of competition policy and to delineate the general legal framework of competition law enforcement by establishing the basis for the standard of proof. In consumer law consumer welfare stands for correcting market failures in order to improve the consumer's position in market transactions. Consumer welfare is concerned with efficient transactions and cost-savings but it is also directed at social aspects of the market such as the safety and health of consumers. Consumer welfare is an economic concept with relevant socio-political and legal implications. However, the economic rationale seems to be often overridden by a political rationale, which is to legitimize the enforcement work of competition authorities' and to reflect society's preferences on income distribution. This article addresses the implications of the consumer welfare standard in welfare economics, political economy and law. The analysis points out to what extent the enforcement of competition law can prevent (final) consumer harm and make (final) consumers better off and what the inherent limits of the promotion of consumer interests are in competition law. Such comparisons clarify and identify the function of this standard and delineate the borderlines between the two disciplines, the possible gaps and unnecessary overlaps they create in regulating markets.

The Controversies of the Consumer Welfare Standard

This paper reviews current regulatory approaches designed to correct market failures and distribute the benefits of liberalization to consumers in recently liberalised network industries. Present evaluations of the liberalisation process show that opening up markets to more competition has not yet resulted in either expected levels of competitiveness or in envisaged consumer benefits. Many consumer related failures were little anticipated; legislation to protect and assist consumers was either late coming or inadequate and often lacked effective enforcement. The paper examines market failures primarily related to the demand side; such as information asymmetries, unfair trade practices, unfair standard contract terms, high search and switching costs, and imperfect decision-making processes. It, however, discusses these imperfections in the broader context of market failures related to incoherent regulation and ineffective competition law enforcement and shows how poor coordination between these regulatory fields leads to suboptimal outcomes. The interplay between general consumer protection and specific consumer issues of sector regulation is discussed and elaborates on specific market deficiencies that draw attention to the intersection between consumer protection and competition law. The discussion incorporates theoretical insights from neoclassical and behavioural economics to consumer problems. The paper focuses on what the liberalization process, so far, has done for consumers by looking at and evaluating both the legislative and policy developments and recent proposals at European level as well as actual implementation and enforcement of these legislations at national level. More specifically, it deals with the energy and the telecommunications markets and their recent developments in the EU. Two case studies provide insight on national regulatory approaches: a case study of the liberalization of the Hungarian telecommunications market and a case study of the liberalization of the Dutch electricity market. The paper proposes a new mode of regulation as well as a new mode of coordination among different layers and fields of regulation and enforcement in order to remedy consumer problems and to achieve competitive markets.

What Has Competition Done for Consumers in Liberalised Markets

This paper discusses the topic of ‘Comparing Laws’ in the specific context of the decentralised enforcement of EU competition law and the parallel application of national competition laws. More specifically, it deals with the harmonisation process between the Member States’ and the EU competition laws. This is a unique process as at first sight it accommodates regulatory competition between the Member States and the Commission, resulting in the emergence of voluntary harmonisati on. However, in fact the decentralised enforcement regime has preserved the Commission’s dominance and Europeanised national competition laws to the model of EU law. Still, thi s process involves active comparative exercises by both the European Commission and the 27 Member States. The paper addresses the question why and how the Commission and the Member States compare competition rules. What makes these comparative exercises worth analysing is, on the one hand, that they are of recent origin and take place against a new d ecentralised enforcement system which has recently been transformed from a supranational EU policy into one which is subject to similar problems of multi-level governance as other substan tive parts of EU law; on the other hand, that the creation of the European Competition Network (ECN) opened the way for spontaneous harmonisation between national and EU competition laws, but at the same time its hierarchical structure preserved certain constr aints that limit its functioning as a platform of true regulatory competition. The public enforcement of EU competition law takes place in a multiple layered setting composed of EU and national rules and super vised by the Commission and 27 national competition authorities (hereinafter NCAs). While t he substantive EU rules that are to be enforced are the same and there is also a high conv ergence between substantive competition rules in national legislations, the procedural rule s and the institutional settings that together form the framework of enforcement have been much less harmonised and reveal a challenging

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Comparing Laws in the Enforcement of EU and National Competition Laws

This comprehensive volume provides a state-of-the-art overview of regulatory economics and reviews the main theories, tools, and domains of regulation

Kati Cseres

Papers

The Controversies of the Consumer Welfare Standard

What Has Competition Done for Consumers in Liberalised Markets

Comparing Laws in the Enforcement of EU and National Competition Laws

Consumer protection in the European Union

The Controversies of the Consumer Welfare Standard