Good Consumer Information: the Information Paradigm at its (Dead) End?

• Published in: Journal of consumer policy Vol. 40; no. 2; pp. 179 - 191
• Main Authors: Oehler, Andreas, Wendt, Stefan
• Format: Journal Article
• Language: English
• Published: New York Springer US 01.06.2017; Springer Nature B.V
• Subjects: Behavioral economics; Commercial Law; Consumer education; Consumer protection; Consumers; Credibility; Criteria; Disclosure; Economic Policy; Economic research; Finance; Information needs; Marketing; Original Paper; Paradigms; Postulates; Product testing; Social Sciences; Transparency; Consumer research; Information paradigm; Behavioural finance; Personal finance; Information model; Consumer information; Household finance
• ISSN: 0168-7034; 1573-0700
• DOI: 10.1007/s10603-016-9337-5

The traditional information paradigm postulates that increasing the amount of information and establishing full transparency help consumers with their decisions. We challenge this assumption and address criteria that good consumer information needs to fulfil. Based on the findings from research in behavioural economics and finance, necessary conditions for good consumer information include transparency, comprehensibleness, and comparability, whereas quality—in terms of clarity, fit to personal needs, and verifiability—represents the sufficient condition for good consumer information. Information that consumers currently receive hardly fulfils these conditions which, in turn, considerably hampers the trustworthiness and usability of this information. To mitigate consumers’ information problem and to recover the idea of the information paradigm, we suggest to extend the information model and to integrate the idea of collective consumers, to establish product testing principles, and to implement controlled minimum standard for (financial) products.