Game design
studied for some time (see the concept of “herding” in behavioural finance, for example). In the gambling sector, especially sports betting, markets look somewhat similar – prices move all the time. However, only recently has the emergence of reference pricing as per the CMA’s definition gained in popularity. So-called “price boosts” and “odds boosts” are now prevalent on many operator’s websites, providing the potential customer with previous prices (the reference price) and boosted odds, often for specific selections as opposed to entire markets. That is not to say that the practice itself is necessarily contributing towards any consumer harm relative to a counterfactual whereby the practice did not exist, but it is worth considering how (if at all) it distorts outcomes. Choice pressure The CMA finds that there is evidence that choice pressure can have a strong effect on consumer behaviour. None of these practices are considered to be almost always harmful and each of them can have benefits. However, the CMA also notes that there is generally less existing academic research into them in the context of consumer harm than into choice structure or information practices. Choice pressure practices may exert influence on consumers, resulting in impulsive, misled and/or unsuitable purchases. In particular, misleading or fake scarcity and popularity claims and fake reviews (a form of messenger practice) can be particularly harmful to consumer choices. Both these practices have been investigated by the CMA. False scarcity claims are already prohibited under consumer protection legislation, while fake reviews are expected to be added to automatically unfair practices under consumer law legislation 6 . The CMA notes that negative effects of commitment and feedback practices are relatively under-researched and most of the studies explore the potential positive benefits, rather than any potential harm. It is worth noting that, the CMA’s paper cites the gambling sector in its list of examples relating to these two practices – including the use of bonusing in commitment, and losses disguised as wins in terms of feedback mechanisms – both of which could be seen as
negative. Remedies vary across practices but generally aim to ensure consumers are not excessively pressured and misled in their decision making. Remedies also include providing relevant information to consumers and tools enabling them to control the exposure to these practices and their autonomy (e.g. control settings, frequency of reminders, etc.).
Table 3: Choice pressure examples OCA practice Description
Evidence
Drip pricing % The choice architect initially shows only part of the price
****
and reveals the full price of the product or service at later stages of the consumer journey The choice architect displays a previous (or future) price with the current price, which makes the current price look more attractive The choice architect decides how any decision-related information is described or presented to a consumer The choice architect makes information difficult to understand by using obscure word choices and/or sentence structure The choice architect gives a consumer too much information about a product or a service such that information about the most relevant attributes is difficult to find and assess
Reference pricing
****
Framing
***
Complex lan- guage %
***
Information overload %
***
Choice pressure – betting and gaming examples The one example we discuss here is scarcity 7 and popularity. Many gambling markets are naturally time limited – the chance to bet the Gold Cup at Cheltenham is limited to once a year, lottery draw closes sales by a given time each draw,
6 Department for Business, Energy & Industrial strategy, Consultation outcome. Reforming competition and consumer policy; government response (Up- dated 20 April 2022). Available https://www.gov.uk/government/consultations/reforming-competition-and-consumer-policy/outcome/reforming-competi- tion-and-consumer-policy-government-response 7 Falsely stating that a product will be available only for a very limited time to elicit an immediate decision is already prohibited in the UK under Schedule 1 of The Consumer Protection from Unfair Trading Regulations (Statutory Instrument No. 1277, 2008)
IMGL Magazine • July 2022 • 31
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