Do Regulators Know Better?

Behavioral regulation is on the agenda of politicians and authorities of most countries. Mandatory approaches and coercive legislation have financial, but also political, costs that are becoming more and more difficult to afford; also the effectiveness and the applicability of these kinds of rules in some domains is in question. This puts alternative solutions like the ones that are within the scope of the Befairly initiative at the center of the academic and policy debate. But because they are popular, and fashionable, and blessed by a huge recent success, these approaches might be misinterpreted and misapplied. To avoid this possible outcome a serious and critical debate has to develop; not all measures are equivalent, not all of them are effective and appropriate in any situation. A critical attitude from those who are certainly convinced of the necessity of adopting a behavioral perspective is appropriate and advisable to try to avoid mistakes. In this chapter issues which are essential for structuring action are debated such as the necessity to develop a common and shared vision of objectives, once an adequate comprehension of the actual economic framework is reached, the suitability of soft compared to hard approaches to regulation, the competence and accountability of regulators.