Within the area of competence of European Competitiveness, both the classical problems of market failure – through market power, external effects such as pollution, asymmetric information distribution or hold-up problems – and regulatory and policy failures are examined. In addition, ESMT examines the importance of recent behavioral theoretical approaches for the understanding of markets and their regulation. These theoretical approaches are partially already discussed in business administration and psychology. For example, under what circumstances can competing companies exploit decision errors of consumers to their advantage and how can this be prevented through reasonable consumer protection? One important methodological approach is Behavioral Economics and Decision Making, which plays a significant role in the research work at ESMT. While these approaches are currently mainly used in the area of European Competitiveness, this research approach will also feed into other areas of expertise.