AbstractFinancial advice could play an essential role in well-functioning markets for retail financial products, given that many consumers find it difficult to evaluate the complex products on offer. However, conflicts of interest, which are pervasive in some parts of the industry, can turn advice into a curse rather than a blessing for consumers, especially when consumers are not sufficiently wary. Through a simple model of financial advice, we overview the pros and cons of various policy interventions, such as imposing mandatory disclosure, banning commissions, and regulating contract cancellation terms. (JEL D14, D18, G21, G28)
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Bibliographic InfoArticle provided by American Economic Association in its journal Journal of Economic Literature.
Volume (Year): 50 (2012)
Issue (Month): 2 (June)
Find related papers by JEL classification:
- D14 - Microeconomics - - Household Behavior - - - Personal Finance
- D18 - Microeconomics - - Household Behavior - - - Consumer Protection
- G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
- G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation
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- Jeffrey Butler & Paola Giuliano & Luigi Guiso, 2012.
"Trust and Cheating,"
EIEF Working Papers Series
1213, Einaudi Institute for Economics and Finance (EIEF), revised Oct 2012.
- Butler, Jeffrey V. & Giuliano, Paola & Guiso, Luigi, 2012. "Trust and Cheating," IZA Discussion Papers 6961, Institute for the Study of Labor (IZA).
- Jeffrey V. Butler & Paola Giuliano & Luigi Guiso, 2012. "Trust and Cheating," NBER Working Papers 18509, National Bureau of Economic Research, Inc.
- Butler, Jeff & Giuliano, Paola & Guiso, Luigi, 2012. "Trust and Cheating," CEPR Discussion Papers 9202, C.E.P.R. Discussion Papers.
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