A framework on behavioural market failures
A framework on behavioural market failures
Original title: Typologi for adfærdsbaserede markedsfejl
In 2016, the Danish Competition and Consumer Authority asked Copenhagen Economics in collaboration with iNudgeyou to develop a framework that allows a better understanding of behavioural problems and their solutions.
We invented a new concept labelled 'behavioural market failure' which is a market failure that is caused by behavioural aspects and cannot be explained by traditional economic text books. We find that the reason for why behavioural market failures occur are very much linked to the type of transaction in the respective market, e.g. automatic transactions via PBS in the case of cell phone subscriptions.
This study is unique in the sense that it is the first to present a comprehensive framework on behavioural market failures which are present across different types of markets and products.
The study was commissioned by the Danish Competition and Consumer Authority.
Download the full report (in Danish) below.
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