Chapter 5 - Competition Law and Behavioural Evidence in a Courtroom?

Summary

INTRODUCTION

How do legal decisions and legal norms actually affect people and their daily behaviour? What people and general population do in response to certain judicial decisions and legal norms? What is actually behavioural law and economics, what is the “traditional” rational choice assumption and what are their main implications, assumptions, suggestions and how to employ them into the daily decision-making? What are the main behavioural economic evidences and insights for competition law? Can behavioural economics and the distilled behavioural evidences serves as a gap filler in explaining real world evidence that neoclassical economic theory cannot explain? Are they ready for the main EU competition law stage? Could judges employ such behavioural economic evidences in their daily decision-making? This chapter attempts to address precisely those issues and seeks to provide answers, suggestions and implications for competition law practitioners and daily judicial decision making in employing behavioural economic evidences and related insights.

In the last two decades, social scientists and law and economics scholars have learned a great deal about how people actually make their decisions. The newly developed field of economics, which was inspired by a triggering difference between the predicted and actual behaviour of rational, self-interested, risk averse person, the behavioural economics, borrowing from psychology and sociology to explain decisions inconsistent with traditional economics, has revolutionised the way economists (and to lesser extent also lawyers) view the world. It is often argued that over the last decade a behavioural economics has, while gradually becoming a mainstream, fundamentally changed the way economists and to a lesser extent, with the development of behavioural law and economics, also lawyers conceptualise the world. Moreover, policy-makers, regulators, judges and competition authorities are increasingly looking to the lessons from behavioural economics to help them determine whether markets are working in the interest of consumers. Competition authorities have for example considered the implications of behavioural economics as a gap filler, as a tool to assess critically the traditional assumptions of specific antitrust policies, to revisit fundamental competition questions and to assess how behavioural economics will affect the degree of convergence/divergence of competition law in EU Member States.