- Journal Article
We present a newly designed market experiment to study regulatory measures in markets with advice inspired by two recently developed theoretical models. In line with our predictions, our experimental markets create conflicts of interest and unsuitable advice biased towards high-commission products. We examine whether two frequently discussed regulation measures - disclosure and fines for ex post unsuitable advice - reduce commission payments and improve advice. None of the regulation measures result in lower commissions and more suitable advice, however, and advice is equally biased in all treatments. Furthermore, with disclosure, conflicts of interest are enlarged, offsetting the potentially restraining effects of disclosure. The potential impact of various behavioural factors is discussed to encourage further research. Show more
Journal / seriesOxford Bulletin of Economics and Statistics
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