A behavioral-pattern driven framework for research on financial consumer protection

This study attempts to advance the argument that targeting specific behavioral patterns serves as a value-adding complement to the rule- and principle-based consumer protection policies in financial markets. To that end, two particular optimization frameworks are specified to elaborate a set of suboptimal behavioral patterns that one can expect from demand- and supply-sides of the financial service sector: (1) a two-period (working age vs. retirement) intertemporal utility maximization framework for financial consumers; and (2) a profit (or net operating income per-period) maximization framework for financial intermediaries. Based on the models specified, a set of behavioral patterns to be tamed is identified and elaborated, and the research and policy agenda to nudge the consumers as well as the intermediaries to improve each behavioral pattern are discussed.