We present a critique of Behavioral Economics, the dominant approach to reforming the regulation of retail credit, and propose a new approach to managing uncertainty in consumer lending. This new approach draws on a different model of decision-making, Distributed Cognition, to improve contract...

In August 2007 the United Kingdom experienced its first bank run in over 140 years. Although Northern Rock was not a particularly large bank (it was at the time ranked 7th in terms of assets) it was nevertheless a significant retail bank and a substantial mortgage lender. In fact, ten years...

The Internet has become an integral part of the everyday life of households, firms and governments. Its proper functioning over the long run is therefore crucial for economic growth and people’s wellbeing more generally. The success of the Internet depends on its openness and the confidence of...

Businesses and sophisticated parties have long used “contract exchanges,” like the Chicago Board of Trade, to obtain a fair price and protect themselves from market volatility. These contract exchanges have greatly benefitted both their participants and the public at large, but participation...

Merchant Authorized Consumer Cash Substitutes (MACCS) have existed in one form or another for hundreds of years although without a generic name. At nineteenth century American railroad construction sites far from established towns, companies paid employees with “scrip.” Coca Cola, beginning...

Recent advances in advertising technology have lead to the development of “native advertising”, which is a format of advertising that mimics the other non-sponsored content on the medium. While advertisers have rapidly embraced the format on a variety of digital media, regulators have...

We analyze in a two-phase model the optimal mix of ex ante experimentation and ex post learning for the dynamic adoption of activities with uncertain payoffs. In a first pre-introduction phase, costly experimentation is undertaken to decide whether to adopt the activity or abandon...

There are some microinsurance schemes in Western Asia but not many. The question is why? The existence of microinsurance in Western Asia shows that it is principally feasible in this part of the world. And the large range of different products offered by the existing scheme shows that the...

Forced arbitration clauses have become almost unavoidable in contracts for financial services and products ranging form credit cards to private student loans. This report examines how the financial services industry uses these clauses to defeat consumers' rights and evade accountability for...