Behavioral Economics, Consumer Protection, and Antitrust

In both consumer protection and antitrust, the use of standard economic analysis has generally been to limit the scope of government intervention. The interest in behavioral economics (and some of the resistance to it) stems from the belief that it justifies intervention that conventional economic analysis suggests is unwarranted. Proponents see behavioral economics as the antidote to the Chicago School poison. Opponents see it as a mutated bacterium, resistant to the economic medicine that has led to improved policy. In this article, I will provide some background on behavioral economics and assess what insights it provides for consumer protection and antitrust policy.