Can entire markets strategically confuse consumers to raise prices? This column tracks the prices of nearly all mobile phone tariffs and handsets in the UK from 2010 to 2012, and finds that quality-adjusted prices rise in the early part of the sample period and decline later. Obfuscation strategies by firms appear to be the primary driver, with the rise in prices strongly correlated with the introduction of dominated tariffs - contracts for which cheaper alternatives exist from the same operator. These strategies reduce product transparency, elevating prices not only for dominated tariffs but also for efficient ones, distinguishing the effect from behavioural price discrimination.

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23 October 2025

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Vox EU

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https://cepr.org/voxeu/columns/confusopoly-unveiled-how-firms-use-complexity-raise-prices

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This publication comes under the following theme: Business dynamism