In this paper,
the authors analyze the regulation about financial consumer protection, under
behavioral economics. In that sense, they mark off the scope of study into the intermediation
financial activity (taking deposits to give loans) and in particular about interest
rates.
In the first chapter, they propose a theoretical framework about the rationality as the main postulation from the neoclassical economics analysis, contrasting it with their proposal about the no-rationality concept and its elements (non-rationality in a strict sense, bounded rationality and irrationality). Also, with that foundation, they claim that the financial consumer is not rational in most of their decisions. That affirmation is based on empirical studies they made and applied and some available literature that documents this topic.
Finally, they
study the main regulatory parameters taken into account in the Latin American
countries about interest rates, looking for prove that those parameters are founded
on a rational financial consumer. The authors conclude that with the mentioned supposal,
the regulation about financial consumer protection does not reach its goals and
make their own approach bearing in mind a non-rational behavior.
This paper was presented during the X Annual Conference of the Italian Society of Law and Economics, held on December 2014 in the University of Rome - La Sapienza.
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