The Office of Fair Trading's mission is "to make markets work well for consumers", but the role which consumers themselves play is increasingly seen as crucial to the success of competition policy. CCP has built a reputation for its consumer research in both the academic and policy world, particularly on consumer activity in switching between providers. This will be deepened and extended through the involvement of behavioural economists, the establishment of capability in developing and analysing consumer surveys, and a wide range of research associated with consideration of the role of the consumer both as participant and objective of competition and regulation policy.

Many standard economic models - and the policy prescriptions that follow from them - have assumed that consumers act as if they are (close to being) rational.  But psychologists and behavioural economists have challenged this assumption: there is much evidence that actual behaviour is liable to depart substantially and seemingly systematically  from the fully rational standard.  A behavioural law and economics approach to the role of consumers in competiton law and policy enriches and deepens the analysis and increases the robustness of policy relevant predictions and conclusions. 

Allowing for possible behavioural influences, the broad questions in this project, which will be approached from theoretical, empirical and experimental perspectives, are:

 How is the welfare of consumers affected by the behaviour of firms?  How does the behaviour of consumers affect the behaviour of firms and market outcomes?  How does the behaviour of consumers affect the efficacies of remedies?  How does the behaviour of consumers affect optimal design of competition law and institutions?

The answers to these questions are key to a better design of remedies and a clearer understanding of when an intervention is possible, necessary and desirable.