Consumer protection and contingent charges
Contingent charges for financial services, such as fees for unauthorized overdrafts, are often controversial. We study the economics of contingent charges in a stylized setting with naive and sophisticated consumers. We contrast situations where the naive benefit from the presence of sophisticated consumers with situations where competition works to subsidize the sophisticated at the expense of the naive, arguably unfairly. The case for regulatory intervention in these situations depends in good part, but not only, on the weight placed on distributional concerns. The economic and legal issues at stake are well illustrated by a case on bank charges recently decided by the UK Supreme Court.
|Date of creation:||Mar 2012|
|Date of revision:|
|Contact details of provider:|| Postal: |
Web page: https://mpra.ub.uni-muenchen.de
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Michael D. Grubb, 2015.
"Consumer Inattention and Bill-Shock Regulation,"
Review of Economic Studies,
Oxford University Press, vol. 82(1), pages 219-257.
- Victor Stango & Jonathan Zinman, 2009. "What Do Consumers Really Pay on Their Checking and Credit Card Accounts? Explicit, Implicit, and Avoidable Costs," American Economic Review, American Economic Association, vol. 99(2), pages 424-29, May.
- Victor Stango & Jonathan Zinman, 2011.
"Limited and varying consumer attention: evidence from shocks to the salience of bank overdraft fees,"
11-17, Federal Reserve Bank of Philadelphia.
- Victor Stango & Jonathan Zinman, 2011. "Limited and Varying Consumer Attention: Evidence from Shocks to the Salience of Bank Overdraft Fees," NBER Working Papers 17028, National Bureau of Economic Research, Inc.
- Diamond, Peter A., 1971. "A model of price adjustment," Journal of Economic Theory, Elsevier, vol. 3(2), pages 156-168, June.
- repec:tpr:qjecon:v:121:y:2006:i:2:p:505-540 is not listed on IDEAS
- Mark Armstrong & John Vickers & Jidong Zhou, 2009.
"Consumer Protection and the Incentive to Become Informed,"
Journal of the European Economic Association,
MIT Press, vol. 7(2-3), pages 399-410, 04-05.
- Armstrong, Mark & Vickers, John & Zhou, Jidong, 2008. "Consumer protection and the incentive to become informed," MPRA Paper 9898, University Library of Munich, Germany.
- Francesco Squintani & Alvaro Sandroni, 2007.
"Overconfidence, Insurance and Paternalism,"
Economics Discussion Papers
643, University of Essex, Department of Economics.
- repec:oup:qjecon:v:121:y:2006:i:2:p:505-540 is not listed on IDEAS
- repec:oup:restud:v:51:y:1984:i:2:p:197-207 is not listed on IDEAS
- Spiegler, Ran, 2014.
"Bounded Rationality and Industrial Organization,"
Oxford University Press, number 9780199334261, July.
- Kosfeld, Michael & Schüwer, Ulrich, 2011.
"Add-on Pricing, Naive Consumers, and the Hidden Welfare Costs of Education,"
IZA Discussion Papers
6061, Institute for the Study of Labor (IZA).
- Kosfeld, Michael & Schüwer, Ulrich, 2011. "Add-on Pricing, Naive Consumers, and the Hidden Welfare Costs of Education," CEPR Discussion Papers 8636, C.E.P.R. Discussion Papers.
- Laibson, David I. & Gabaix, Xavier, 2006.
"Shrouded Attributes, Consumer Myopia, and Information Suppression in Competitive Markets,"
4554333, Harvard University Department of Economics.
- Xavier Gabaix & David Laibson, 2006. "Shrouded Attributes, Consumer Myopia, and Information Suppression in Competitive Markets," The Quarterly Journal of Economics, Oxford University Press, vol. 121(2), pages 505-540.
- Xavier Gabaix & David Laibson, 2005. "Shrouded Attributes, Consumer Myopia, and Information Suppression in Competitive Markets," NBER Working Papers 11755, National Bureau of Economic Research, Inc.
- Schwartz, Alan & Wilde, Louis L., 1983. "Imperfect Information in Markets for Contract Terms: The Examples of Warranties and Security Interests," Working Papers 480, California Institute of Technology, Division of the Humanities and Social Sciences.
- Stefano DellaVigna & Ulrike Malmendier, 2006. "Paying Not to Go to the Gym," American Economic Review, American Economic Association, vol. 96(3), pages 694-719, June.
When requesting a correction, please mention this item's handle: RePEc:pra:mprapa:37239. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Ekkehart Schlicht)
If references are entirely missing, you can add them using this form.