Behaviorally Informed Financial Services Regulation

The New America Foundation has published a new paper titled "Behaviorally Informed Financial Services Regulation" by Eldar Shafir, Michael Barr, and Sendhil Mullainathan.

From the abstract: "Regulation is largely stuck in two competing models-disclosure, and usury or product restrictions. This paper explores a different approach, based on insights from behavioral economics on the one hand, and an understanding of industrial organization on the other. At the core of the analysis is the interaction between individual psychology and market competition. This is in contrast to the classic model, which relies on the interaction between rational choice and market competition."