Information
CLP = Consumers' Contractual Decisions between Law and Psychology
Consumers make decisions that bind them contractually almost every day. Depending on the type of contract, bad decisions can be low-impact or high-impact, and they can even threaten livelihoods: e.g., over-indebtedness, loss of housing, health risks. But what makes people make good or bad contract decisions? And who or what protects them from bad decisions?
On the one hand, these are legal rules. But the decision-making process is much more complex than the EU and national legislators assume. The latter still predominantly assume an unrealistic human model, the rational, comprehensively informed "homo economicus." They use rules tailored to this human model, which therefore partly fail to achieve their regulatory goal - consumer protection.
This is where psychology and experimental economics, the so-called interdisciplinary "decision science" or "behavioral economics," can help. These show with increasing precision and differentiation that people's decision-making behavior depends on a variety of factors (e.g. emotions, prejudices and rules of thumb) and is not purely rationally controlled. The founders of this line of research, Kahneman, Tversky and Vernon Smith (USA), were awarded the Nobel Prize in Economic Sciences in 2002.
Companies have been using these research results for decades to unerringly influence consumers and in this way to increase their sales more and more. The use of realistic psychological foundations for more effective government legislation and market regulation was first proposed nearly 20 years ago by a line of research in the U.S. known as "behavioral law and economics." Richard Thaler was awarded the Nobel Prize in Economics for it in 2017. In Europe, however, this research has not really taken root until today. We find this very regrettable and want to change that.
Our Graz research group is attempting to develop stable foundations for taking into account the insights of modern psychology, behavioral economics, and decision sciences in lawmaking in the interdisciplinary field of consumer contract law, which is still little researched. Later expansion to other areas of law is planned. The CLP project brings together researchers from the fields of psychology, law, and economics. Methodologically, we build on the "Behavioral Law and Economics" approach and develop it further, e.g., by complementing the "ecological rationality" model of Gerd Gigerenzer et al. In this sense, simple decision rules, so-called "rules of thumb" or "heuristics", can lead to better decision results in certain decision situations than the elaborate weighing of all available information. Experiments are designed to show how consumers actually react to being influenced by legal rules and how - compared to the current legal situation - they can be enabled to make good contract decisions more effectively and accurately. Thus, our primary goal is not to adapt the consumer to the law, but to adapt the law to the consumer, taking into account the specific contracting environment and situation. Our current areas of work are: Mobile phone contracts, online shopping and investments.
