What makes consumers switch mobile phone tariffs?
The potential psychological pain of nasty surprises on mobile phone bills is a great motivator to switch tariffs, according to research by Christos Genakos and colleagues. Their study notes that navigating through thousands of tariff plans for mobile phones to find the best one is not easy in today’s telecoms market – and having an ‘expert friend’ calculate the contract with the biggest savings definitely helps. But the findings suggest that regulators cannot rely on price comparison sites to discipline the market since savings are not necessarily the first thing even well informed consumers are looking for. Rather, it is their desire to avoid psychological losses.
22 February 2016 Paper Number CEPCP465
This CentrePiece article is published under the centre's Growth programme.