Behavioural Finance and Investor Protection Regulations

The article deals with behavioural assumptions in legal norms, in particular with regard to investor protection norms in Europe and Germany as well as court rulings. Whereas traditional legal norms are based on the assumption of rationale behaviour, the financials crisis has demonstrated the pitfalls of the classical notions of economics, thus leading to new insights of behavioural economics. However, it is still unclear how behavioural economics may serve as a means to improve legal protection of investors. Neither a strong paternalism nor a simple extension of information obligation may suffice in the future.