Behavioural science offers both explanations for, and solutions to, behaviour that leads to consumers paying more than they need to and sticking with suppliers even when there are better deals and higher customer satisfaction elsewhere in the market.
We argue that regulators should be designing remedies with behavioural science at the forefront of their thinking, to help consumers make better choices for themselves and prevent businesses from exploiting their behavioural biases. This new approach is not necessarily about introducing more regulation, but making regulation more effective. Indeed, in some cases this approach may point towards the replacement of detailed regulations with principled-based regulations which set out the outcomes the regulator expects the market to deliver for consumers.