A framework is introduced for examining consumer and market problems as a function of consumer segment interaction patterns. Three patterns of interactions are described as consisting of positive, negative, or no spillovers among consumer segments. The efficacy of regulatory remedies is shown to be affected by the type and extent of these interaction patterns. The framework complements and extends conventional aggregate cost-benefit approaches by: 1) treating consumer interactions as a central feature of the market system, 2) focusing on how various interaction patterns affect the distribution and intensity of spillovers among consumers, and 3) describing how policy remedies can be used to facilitate or overcome these interaction patterns. In spite of the potential contributions of this approach to policy remedy selection and implementation, there are major obstacles to its use, including: 1) the imposition of large data requirements upon regulatory agencies, and 2) the fact that policy decisions are now made by different regulatory bodies with different agendas.

[Download the Manuscript] [Home]