Professors Bob Sugden and Bruce Lyons have been developing a conceptual framework that can be used to assess the fairness or unfairness of pricing strategies by firms.  This involves a new concept of ‘transactional fairness’, based on theoretical ideas from Bob's book, The Community of Advantage, but applied to policy issues that are currently highly salient for regulators. 

This work has been cited in the report, 'Power to the people: stronger consumer choices and competition so markets work for people, not the other way round' (PDF) by John Penrose MP.  Known as the Penrose Report, it is an independent review of competition policy, commissioned by the government.  Bob and Bruce’s working paper on ‘transactional fairness’ features in this report (page 48) and is built into one of its recommendations.  

On 7 October 2021 John Penrose delivered the first of the prestigious annual Beesley Lecture Series. Building on the report, Power to the People, John outlined the state of competition policy, described upcoming challenges for regulators and set out how regulatory reform can best meet those challenges. During his lecture, there was positive advocacy of ‘transactional fairness’ (as a way to futureproof consumer protection) - by both John Penrose MP (lecturer) and Thomas Sharpe QC (respondent), who both gave full credit to the research by Bruce Lyons and Robert Sugden. The Beesley Lecture series attracts the foremost thinkers including economists working for regulators, competition authorities, companies in regulated sectors or in consulting, as well as policy makers, academics and lawyers.

Bob and Bruce have completed a more polished version of the ‘transactional fairness’ working paper and submitted it to the Journal of Law and Economics. See below for the some of the occasions they have presented on the topic of transaction fairness and unfair price discrimination:

• at the Fair Value roundtable organised by the FCA with participation by the chief economists of all the main UK regulators (CMA, FCA, OFCOM, OFGEM, OFWAT, PRA) - 4 May 2021
• with BEIS consumer team - 26 April 2021 
• at the NIBS Workshop 'Behavioural Science & Market Regulation' - September 2020 (with discussant Rohan Grove, CMA)
• during a visit by Ofgem to CCP on 19 November 2019
• at Ofgem on 3 October 2019
• to the FCA on two occasions - 24 June 2019 and 3 October 2019
• at the NIBS Workshop, 18 - 20 September 2019, University of Warwick
• at Ofcom on 25 March 2019

You can also read about this topic in a UEA blog post (March 2019) entitled, "Why the CMA is wrong in its proposals for reform and what should be done instead".

This work was presented by Bob and Bruce at the CCP 2021 conference "Rethinking Consumer Policy: Lessons learned and options for reform" (June 2021).  Their presentation is currently available via YouTube.

The interest from regulators is very encouraging. It is hoped the new paper will establish the academic respectability of these ideas, and thus increase their potential for impact in the regulatory community.