Protecting Sticky Consumers in Essential Markets

Walter Beckert and Paolo Siciliani
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Walter Beckert: Birkbeck, University of London

No 2202, Birkbeck Working Papers in Economics and Finance from Birkbeck, Department of Economics, Mathematics & Statistics

Abstract: This paper studies regulatory policy interventions that are aimed at protecting sticky consumers who are exposed to the risk of being taken advantage of. 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: with regard to the stated consumer protection objective and also with regard to 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: 2022-07
New Economics Papers: this item is included in nep-com and nep-reg
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https://eprints.bbk.ac.uk/id/eprint/48824 First version, 2022

Related works:
Journal Article: Protecting Sticky Consumers in Essential Markets (2022)
Working Paper: Protecting sticky consumers in essential markets (2021)
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