Homo economicus, behavioural sciences, and economic regulation

on the concept of man in internal market regulation and its normative basis

Jens-Uwe Franck

Kai Purnhagen

pp. 329-365

in: Klaus Mathis (ed), Law and economics in Europe, Berlin, Springer, 2014

Abstract

We investigate how EU law conceptualizes the individual to whom internal market regulation is addressed. Our analytical point of departure is a stylized information paradigm , whereby for reasons of internal market benefits, market players have to bear the burden of perceiving and processing information that is relevant in respect of an intended transaction, as well as disadvantages should they be ill-equipped to cope with this assignment. Although the ECJ implemented the normative concept of a well-informed, observant and circumspect consumer, it never adopted such a stylized information paradigm . The EU legislature assists market players in perceiving and processing information, and even seeks to steer their decision-making process. We reconsider whether or to what extent this should be understood as an advancement of an information paradigm or rather as a "behavioural turn". Only a differentiated approach that balances the internal market rationale with potentially conflicting rights meets the exigencies of EU law.