It fell to economists only to explain the consumer's decisions, not to second-guess them.The AEA's latest annual meeting, held last weekend, made one thing abundantly clear: this ritual deference to consumer sovereignty is slipping.
Asked to explain the consumer protections in the balance billing rules she has proposed, Ms. Kitzman said, "The rule is not done, so we can kind of start and stop with that".
If the customer is lured in amid the confusion, Rockefeller explained, the consumer's consent is taken as a given, and the third-party business already has the credit card number the consumer entered for the initial purchase.
Furthermore, existing theories also support negativity bias in explaining the consumer information evaluation process.
When times get tough, he explains, the consumer needs a compelling reason to buy, and that reason is a dramatic change in fashion.
That's because, he explains, the consumer is looking for uniqueness in these categories vs. electronics, books, household supplies, grocery and more.
Yet companies and institutions that compile such data often fail to adequately explain the risks to consumers, they say.
And later this year, Trans Union, one of the three major credit bureaus, plans to create its own credit scores and explain the results to consumers.
"If you remember back to the launch of Blu-ray and HD DVD, when you tried to explain the difference to consumers, the first thing they do is stop buying," Mr. Sarandos said.
In a humorous effort to explain the difference to consumers, Yellow Book USA, the largest of the independents, introduced this month its most expensive campaign since the company was founded in 1930 as a Long Island community directory.
