Changing the Numbers: UK Directory Enquiries Deregulation and the Failure of Choice

Rufus Pollock ()

Cambridge Working Papers in Economics from Faculty of Economics, University of Cambridge

Abstract: In 2003, the UK `liberalised' its telephone directory enquiries service with the aim of introducing competition so as to improve quality and lower costs. Unfortunately the results did not match expectations. Proliferation of numbers led to consumer confusion and high price firms with no discernible quality advantages but which employed heavy advertising came to dominate the market. Consumer and total welfare appear to have declined. This example raises important questions for regulators. In particular, with limits on information and rationality, it may sometimes be better to limit choice but increase competition to supply that choice.

Keywords: Competition; Deregulation; Advertising; Bounded Rationality (search for similar items in EconPapers)
JEL-codes: L43 L51 (search for similar items in EconPapers)
Date: 2009-04-07
New Economics Papers: this item is included in nep-com, nep-mkt and nep-reg
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