I had a truly good time in Amsterdam this week-end. I was at the Amsterdam Center for Law & Economics (ACLE), which organized its 8th Annual Competition & Regulation Meeting.
Part of the workshop took place at De Industrieele Groote Club, a very luxurious environment with wide comfortable chairs for wide, comfortable industrialists!
The theme this year was Behavioral Competition and Regulation, and I presented my paper with Paolo Crosetto on whether consumers prefer offers that are easy to compare (link).
A number of interesting papers were presented (see list here). Botond Köszegi looked at markets where some consumers are vulnerable to firms’ deceptive strategies (link) and showed that the use of deceptive strategies is particularly likely to survive in socially wasteful industries. Maurice E. Stucke discussed how to integrate insights from behavioral economics into competition policy (link), and underlined how following the rule of reason could weaken the rule of law when dealing with competition cases.
There were a number of interesting experimental papers as well. Among those, Giancarlo Spagnolo investigated whether collusion is helped or hindered by the speed with which one can react to deviations from the collusive agreement (link) and Jona Linde discussed how nudges can lull consumers into not paying sufficient attention to the choice tasks at hand (link, paper joint with Thomas de Haan, who now works here at the EIC).
In most of my conversations there, I tried to push the idea that we should also get rid of the assumption that firms are behaving honestly vis-à-vis consumers. That is, we generally assume that a contract, once signed, will be respected, and that there is an inherent “true”, correct way to interpret a contract. This may hold in well-regulated societies, but does not apply well much further.
I am therefore interested in work on ambiguous contracts, how their interpretation will depend on the relative strength of the contracting parties, and how far they can divert from short-term self-interest.
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