Interactions between competition and consumer policy
AbstractThis paper discusses complementarities and tensions between competition policies and consumer protection policies. The paper argues that markets will often supply adequate customer protection without the need for extra public intervention. Special areas where intervention might be needed are discussed, including the need to combat deceptive marketing and the need to provide additional market transparency (about both headline prices and shrouded product attributes). A few instances are presented of how more intense competition can worsen the outcomes for (some) consumers. Situations in which poorly designed consumer policies can harm consumers are discussed, including how they can be used to protect incumbent suppliers, how they can relax competition between oligopolists, how they can reduce consumer choice, how they can focus on one aspect of market performance at the expense of others, and how they can lead consumers to take insufficient care in the market.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 7258.
Date of creation: Feb 2008
Date of revision:
Competition policy; consumer protection; fraud; market transparency; add-on pricing;
Other versions of this item:
- Mark Armstrong, 2008. "Interactions between Competition and Consumer Policy," CPI Journal, Competition Policy International, vol. 4.
- D18 - Microeconomics - - Household Behavior - - - Consumer Protection
- M30 - Business Administration and Business Economics; Marketing; Accounting - - Marketing and Advertising - - - General
- L15 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Information and Product Quality
This paper has been announced in the following NEP Reports:
- NEP-ALL-2008-02-23 (All new papers)
- NEP-COM-2008-02-23 (Industrial Competition)
- NEP-MIC-2008-02-23 (Microeconomics)
- NEP-MKT-2008-02-23 (Marketing)
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