What is wrong with caveat emptor?
The economics of information has helped to answer some such questions, and I will note some of the formative contributions in that area. Then I will attempt to show how the economics of lock-in — a branch of competition economics — can help illuminate a range of consumer policy issues. Indeed it would appear that a number of ‘consumer’ or ‘fair trading’ issues are at root competition issues and hence amenable to competition analysis. Finally, I will mention some possibly fundamental limitations on what economics, as we know it, can contribute to consumer policy. The discussion will concentrate mainly on information problems in markets. Of course market imperfections do not necessarily call for public policy solutions. Market mechanisms can often overcome information problems quite well. And where the benefits of policy intervention are judged to outweigh its costs, it is often better to improve consumer information — to help markets work better — than to restrict the choices available
