Protecting Vulnerable Consumers in "Switching Markets"

Walter Beckert () and Paolo Siciliani

No 1808, Birkbeck Working Papers in Economics and Finance from Birkbeck, Department of Economics, Mathematics & Statistics

Abstract: This paper studies regulatory policy interventions aimed at protecting vulnerable consumers who are disengaged and thus exposed to exploitation. We model heterogeneous consumer switching costs alongside asymmetric market shares. This setting encompasses many markets in which established firms are challenged by new entrants. We identify circumstances under which such interventions can be counterproductive, both with regard to the stated consumer protection objective and the complementary aim to promote competition.

Keywords: switching costs; price discrimination; uniform pricing; most-favoured customer clauses; price regulation; competition. (search for similar items in EconPapers)
JEL-codes: D4 L11 L13 (search for similar items in EconPapers)
Date: 2018-08
New Economics Papers: this item is included in nep-com, nep-ind and nep-ore
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https://eprints.bbk.ac.uk/id/eprint/23628 First version, 2018 (application/pdf)

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Working Paper: Protecting vulnerable consumers in "switching markets" (2018)
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