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When Competition is Not Enough: Consumer Protection
Author(s) -
Smith Rhonda L.
Publication year - 2000
Publication title -
australian economic papers
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.351
H-Index - 15
eISSN - 1467-8454
pISSN - 0004-900X
DOI - 10.1111/1467-8454.00101
Subject(s) - harm , business , consumer protection , competition (biology) , product (mathematics) , position (finance) , liability , information asymmetry , industrial organization , product liability , key (lock) , search cost , law and economics , marketing , economics , commerce , microeconomics , finance , law , computer security , ecology , geometry , mathematics , political science , computer science , biology
Rather than market structure, it is the nature of the goods and services and the cost of obtaining and processing information that may place consumers in a poor bargaining position. The article outlines the key provisions for consumer protection in Australia, Part V of the Trade Practices Act. It discusses search costs, and the factors that limit search, and explains how the conduct of suppliers (or others) may reduce search costs. Asymmetry of information is identified as a necessary (but not sufficient) condition for misleading consumers. When products are sub standard or are used incorrectly, they may harm consumers or cause property damage and in some circumstances this may be best addressed via product liability laws. The article concludes by considering how firms or industries can be more pro‐active in relation to consumer protection.