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

Competition law has always formed a core pillar of the European integration process and so it was among the crucial EU requirements set for the candidate countries. Competition law had a significant influence on the way competition laws and institutions were shaped in the candidate countries. In the pre-accession phase this was due to conditionality, however once conditionality terminates and candidate countries become Member States they fall under the EU law and its governance mechanisms, in competition law under Regulation 1/2003. While pre-accession rule transposition is well documented and closely monitored by the EU in its Regular Reports on the candidate countries, the EU’s internal governance mechanisms are less visible and have not been examined in the light of its external model that developed in the course of its eastward enlargement. In EU competition law such internal mechanisms have developed within the framework of Regulation 1/2003. These post-accession compliance mechanisms are critical both with regard to the effectiveness of the EU’s external governance and the internal system of Regulation 1/2003.The aim of this paper is to analyse the interplay between the EU’s external (pre-accession) and internal (post-accession) governance model in the field of competition law and to arrive at a deeper understanding of the EU’s Europeanization strategy at the intersection of the external and internal governance models. Accordingly, the paper maps the EU’s external law and governance model that applies vis-a-vis third countries that wish to join the EU and examines to what extent and how this external model has shaped the EU’s internal governance model vis-a-vis its Member States. It analyses the role of Regulation 1/2003 in creating an effective implementation of EU competition law in the Member States and its governance mechanisms that framed the Europeanization process. In order to evaluate the effectiveness of post-accession compliance in the Member States the paper examines the compound procedural framework composed of EU and national administrative rules that underlies and challenges the enforcement of EU competition law and investigates how administrative capacity of the national competition authorities may effect competition law enforcement. This inquiry includes the detailed assessment of the European Competition Network as the EU’s main mechanism to monitor compliance of Member States with EU law in the post-accession phase.

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Accession to the EU's Competition Law Regime: A Law and Governance Approach

Analysis of the applicable legal frameworks and suggestions for the contours of a model system of consumer protection in relation to digital content contracts. - Final report: Comparative analysis, law & economics analysis, assessment and development of recommendations for possible future rules on digital content contracts

This paper analyzes the (pro)active role consumers could (and are encouraged by the respective policy to) assume in markets that emerged due to European market liberalization and technological changes. These changes expanded consumer markets and changed regulatory architectures accordingly. Consumers’ purchasing decisions became key to the well-functioning of markets: they are entrusted to regulate markets and contribute to the competitiveness and the legitimacy of market processes. In the EU, consumers are expected to contribute both to EU market integration and to European society. However, this new regulatory role of the consumer is not matched with a corresponding legal framework. The policy discourse on consumers’ active participation in markets and even their accountability for regulating markets is not matched with the necessary legal (consumer) provisions to do so. The mismatch between legal rules and consumers’ new role in market regulation may lead to regulatory ineffectiveness and legal uncertainty. Moreover, while technological developments make this active consumer role possible, there is in fact also a gap between law and technological development, which can lead to the problem of ‘regulatory disconnection.’ These problems are especially present in the EU energy sector, where technical developments such as smart meters, solar panels, decentralized energy storage, etc., enable a proactive role of energy consumers. Consumers are often prosumers of energy i.e. consumers who produce their own energy. This paper critically analyzes current EU law on the (energy) consumers’ new role in market regulation. It analyzes normative EU law concepts and definitions of the consumer and examines whether and how rules comply with the concept of the active regulatory consumer. The paper uses a case-study of the prosumer-driven local energy production initiatives and examines whether the energy consumers’ new role creates regulatory disconnection, especially if it is not matched by the progress in corresponding EU law provisions.

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The Regulatory Consumer: Prosumer-Driven Local Energy Production Initiatives

Enforcement of competition law affects consumers' economic interests, as part of the public interests EU competition law protects. Therefore, consumers ought to be involved in the respective enforcement procedures. Against this normative background, we analyse consumers' access to the public enforcement by the Commission; we assess whether and how the formal role they are assigned during this procedure and the way access is defined enable consumers to protect their economic interests. We identify outer and inner limits to consumers' access to competition enforcement procedures, arising from the Commission's discretion in handling complaints and in defining access to information. We critically evaluate those limits against the contention that the enforcement of competition law rules, and the way it is pursued by administrative actors, ought to be guided by the public interests inherent in EU competition law.

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Consumers’ access to EU competition law procedures: outer and inner limits

This paper analyzes the question how EU and national laws implemented and how courts and regulatory authorities apply two opposing regulatory approaches and the corresponding legally defined images of consumers in market regulation: the active and responsible consumer concept on the one side along with the more protective concept of vulnerable consumers on the other side. 
The paper examines the normative concept of the consumer from a broad perspective of market regulation by focusing on unfair commercial practices as this is a horizontal instrument involving a broad range of transactions in various markets and because the Unfair Commercial practices Directive 2005/29 specifically lays down the normative concept of the consumer (both ‘average’ and ‘vulnerable’) in its provisions. The analysis proceeds on the basis of the normative standard as developed in the ECJ’s jurisprudence on free movement rules and further provides a case study of two Central and Eastern European Member States – Hungary and Poland. It examines how EU law and national laws implemented, and how the ECJ and national courts and regulatory authorities interpret the normative concepts of the consumer (both ‘average’ and ‘vulnerable’). 
The specific questions the paper analyzes are: Do the existing normative notions of the ‘average’ consumer and the definition of consumers in EU and national law correspond to public policy discourse on consumers’ active role in regulating markets? How do these laws address the vulnerability of consumers? How do the EU and national law notions conceptually link to each other? And most importantly how do courts and regulatory authorities interpret these notions? 
The paper finds that while there are clear normative concepts of the consumer in the legislation and EU free movement jurisprudence, their application in other fields of EU consumer law, as well as in national law, demonstrate a more nuanced image of the consumer. The paper argues that the legal rules and the envisaged concepts of the consumer need to be enriched by insights from law enforcement. Moreover, both law and law enforcement must be informed both of how markets evolve and how the role of consumers changes as well as enriched by the results from other social sciences, most notably behavioural economics studying consumer behaviour.

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Kati Cseres

Papers

Accession to the EU's Competition Law Regime: A Law and Governance Approach

The Regulatory Consumer: Prosumer-Driven Local Energy Production Initiatives

Consumers’ access to EU competition law procedures: outer and inner limits

The Regulatory Consumer in EU and National Law? Case Study of the Normative Concept of the Consumer in Hungary and Poland