Do consumers switch to the best supplier?

Wilson, Chris M and Waddams Price, Catherine (2010) Do consumers switch to the best supplier? Oxford Economic Papers, 62 (4). pp. 647-668. ISSN 1464-3812

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This paper demonstrates that the ability of consumers to choose the best alternative supplier is limited even in a relatively simple and transparent market. Across two independent datasets from the UK electricity market we find, on aggregate, that those consumers switching exclusively for price reasons appropriated less than a half of the gains available. While such outcomes can be explained by high search costs, the observation that at least 17% of consumers actually reduced their surplus as a result of switching cannot. We rule out an explanation of incorrect demand prediction, and test for others including mis-selling.

Item Type: Article
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: 12 Apr 2011 15:49
Last Modified: 22 Apr 2023 00:08
DOI: 10.1093/oep/gpq006

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