The Consumer Option Model for Withdrawal Rights in the EU: Analysis of an Alternative Design

Simone Ranftl (), Brigitta Lurger (), Hilmar Brohmer () and Ursula Athenstaedt ()
Additional contact information
Simone Ranftl: Institute of Civil Law, Foreign Private Law and Private International Law, University of Graz, Austria
Brigitta Lurger: Institute of Civil Law, Foreign Private Law and Private International Law, University of Graz, Austria
Hilmar Brohmer: Institute of Psychology, University of Graz, Austria
Ursula Athenstaedt: Institute of Psychology, University of Graz, Austria

American Journal of Trade and Policy, 2022, vol. 9, issue 1, 23-42

Abstract: Under EU law, consumers have a mandatory “right of withdrawal” in certain situations. Economic and legal literature raises severe doubts as to its effectiveness and fairness. This article focuses on an alternative design previously discussed in the literature: the “consumer option model.” Under this model, every online consumer can choose between a purchase with the withdrawal right and a purchase without such a right for a slightly lower price. The consumer option model offers mandatory protection and is more consumer-friendly than the removal of all legislative prescriptions – where granting the right would be solely at the businesses' discretion. Within the framework of an experimental study, an inter¬disciplinary team of researchers at the University of Graz examined this alternative design. The 319 study participants, who were Austrian residents, were divided into three groups and purchased two different products in a simulated online shop with or without the right of withdrawal. For these three groups, the right of withdrawal was presented as an opt-out, an opt-in, or a no default choice. Contracts with a right of withdrawal displayed a higher price than contracts without it. The results indicated that consumers were most likely to choose the right of withdrawal when it was presented as an opt-out option and least likely when it was presented to them as an opt-in option. In addition, many subjects indicated that they were not even aware of the given choice in the form of an already set checkmark. Hence, status quo bias as well as framing effects played a role and could influence the consumer decision to conclude the online contract with or without the right of withdrawal, and this independently of any interpersonal differences. Personal dispo¬sitions, such as the regulation focus or the willingness of risk-taking, neither played a role nor did gender or income. Consumer choices differ with the value of the purchased product. The study, thus, revealed the preference of (only) a certain percentage of Austrian consumers to conclude online contracts without a right of withdrawal in exchange for a lower product price (which is currently prevented by EU law). To safeguard free and informed consumer choices, the legislative option model would have to be formulated and offered by the trader in a neutral form, void of any defaults.

Keywords: Right of withdrawal; Consumer law; Mandatory right; Option model; Consumer behavior; Framing; Status quo bias (search for similar items in EconPapers)
JEL-codes: D18 (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://abc.us.org/ojs/index.php/ajtp/article/view/617 Full text (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ris:ajotap:0010

Access Statistics for this article

American Journal of Trade and Policy is currently edited by Charles A. Rarick

More articles in American Journal of Trade and Policy from Asian Business Consortium Asian Business Consortium, 10-B-6, Darussalam Tower, Mirpur Road, Dhaka-1216, Bangladesh.
Bibliographic data for series maintained by Alim Al Ayub Ahmed ( this e-mail address is bad, please contact ).