The OECD Committee on Consumer Policy is developing new ways to improve market efficiency. It is putting together a toolkit to give policy-makers better instruments for directing consumer policy.
According to OECD studies, developing market efficiency through consumer policy is an increasing challenge. The problem is that policy-makers have little information concerning how consumers' behaviour affects market efficiency.
A new thing is that consumer behaviour has been examined from the viewpoint of economics and behavioural science. The goal is to find new ways to develop regulatory systems and to monitor their effectiveness.
The committee's studies show that current consumer policy steering is based too much on the idea of the rational consumer, who in rapidly changing markets is able to make purchasing decisions on the basis of comparable quality and price information so as to promote competition, which is in consumers' interests.
In practice it may be impossible for consumers to take advantage of all the information that is available and act accordingly. Competition may not work so well because comparing products is difficult and time-consuming and additional benefits or loyalty programme benefits may influence purchasing decisions excessively.
Efficient competition is in the interests of both consumers and businesses, however. For competition policy and consumer policy to complement each other better and promote social justice, consumer policy should ensure that consumers benefit from competition, have an equal position as contract parties and can trust rules that apply to relations between consumers and traders. Consumer policy should be based on consumers' real behaviour and possibilities.
Finnish members on the OECD Committee on Consumer Policy are Deputy Director General Kristian Tammivuori from the Ministry of Trade and Industry and Director Anja Peltonen from the Consumer Agency. The latter is presently serving as vice-chair on the committee's executive. The committee establishes working groups to consider particular issues, and the Finnish Consumer Agency is participating in the working group that is responsible for these Roundtable discussions.
Studying market efficiency is also a timely matter in the EU. The Commission is examining the subject from the viewpoint of consumer detriment: how much money consumers lose as a result of businesses' imperfect or illegal activities and how much of this they cannot get back.
Read more about the OECD's reports
Report on Second Roundtable on Economics for Consumer Policy, 25-Jul-2007
Report on a Roundtable on Demand-side Economics for Consumer Policy, 28-Apr-2006