Gain or Pain: Does Consumer Activity Reflect Utility Maximisation?

Chang, Yoonhee Tina and Waddams Price, Catherine (2008) Gain or Pain: Does Consumer Activity Reflect Utility Maximisation? Working Paper. Centre for Competition Policy.

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Competition Authorities are introducing new informational remedies to help consumers search and switch more actively. Using a specially commissioned data set, and unique direct estimates of the gains, search and switching time which consumers anticipate, we examine the determinants of consumer activity in eight markets. We find that expected costs (and to some extent gains) do influence consumers as a utility maximising model would predict; but that their role is small, and other factors, particularly experience of switching in other markets, are also influential. We conclude that consumers’ confidence in their own estimates is crucial in encouraging market activity.

Item Type: Monograph (Working Paper)
Faculty \ School: Faculty of Social Sciences > Norwich Business School
UEA Research Groups: Faculty of Social Sciences > Research Groups > Responsible Business Regulation Group
Faculty of Social Sciences > Research Centres > Centre for Competition Policy
Depositing User: Catherine Waddams
Date Deposited: 08 Apr 2011 08:59
Last Modified: 24 May 2023 05:35


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