Business Consumer and The Government

India’s new economic policies stress the need for research on “Business, Consumer and Government”, in order to develop markets for experience and credence goods by improving the relationship between the consumer and the producer. Asymmetric information between the producer and the consumer may result in the collapse of the entire market system. In addition, consumers’ misperception about product risks may induce the producer to under supply reliability. Similarly, prevalence of moral hazard and adverse selection may reduce separating equilibrium conditions in the market. In India, market institutions such as reputation may not be effective because consumers are unable to learn signals of a high quality producer. Thus, the scope for opportunistic behaviour on the side of the producer is very high and calls for government intervention to protect consumer interests through liability and regulatory systems. Economic analysis of liability versus regulation indicates that neither liability nor regulation provides incentives to exercise socially desirable levels of came by the parties. Therefore, there is need for an optimal-mix of liability and regulatory systems. India has consumer Courts and Bureau of Indian Standards to protect the interests of consumes. Murali Prasad Panta examined the functioning of the systems. He also reviewed the functioning of consumer protection mechanism in Germany in order to draw possible lessons to India. The book ha an interdisciplinary approach and should be useful to students of Economics, Law and Economics, Business Administration, and Consumer Studies. It will also be useful to consumer counsels, members of Consumer Courts, non-governmental organisations, and policy makers.

Murali Prasad Panta was born in 1965 at Aruduru Village in Andhra Pradesh. He has a M.A. and M.Phil in Economics and P.G. Dipoma in Econometrics from S.V. University, Tirupati and Ph.D. in Economics from the University of Hyderabad. a Deutscher Akademischer Austauschdienst (German Academic Exchange Service) Sandwich Model Fellwoship holder, he has a Degree of European Master in Law and Economics from the Institute for Law and Economics in University of Hamburg. At present the author is in the National Council of Applied Economics Research, New Delhi.