Customer Service Quality and Incomplete Information in Mobile Telecommunications: A Game Theoretical Approach to Consumer Protection

Rafael López Zorzano, Teodosio Pérez-Amaral, Teresa Garín-Muñoz and Covadonga Gijón Tascón
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Rafael López Zorzano: Universidad Complutense, Spain.
Covadonga Gijón Tascón: Universidad Complutense, Spain.

No 2012-23, Documentos de Trabajo del ICAE from Universidad Complutense de Madrid, Facultad de Ciencias Económicas y Empresariales, Instituto Complutense de Análisis Económico

Abstract: There is growing evidence that low-quality customer service prevails in the mobile telecommunications industry. In this paper we provide theoretical support to this empirical observation by using simple game theoretical models where inefficient low-quality service levels are part of an equilibrium strategy for the firms. We also find that the inefficiency is due to a demand-side market failure generated by incomplete information, and that it does not necessarily vanish with competition or with repeated interaction. This is particularly important in terms of policy implications because it suggests that the inefficiency should be solved through regulation via consumer protection.

Keywords: Mobile telecommunications; Consumer protection; Game theory; Customer services; Competition; Oligopoly; Market failure; Experience goods; Incomplete information. (search for similar items in EconPapers)
JEL-codes: D18 D43 D82 L15 L96 (search for similar items in EconPapers)
Pages: 22 pages
Date: 2012-09
New Economics Papers: this item is included in nep-com, nep-cta and nep-ind
Note: The authors wish to thank helpful comments from participants at the 23rd European Regional Conference of the International Telecommunication Society, held in July 2012 at Vienna University of Economics and Business. Corresponding author: Rafael López Zorzano, ralopez@ccee.ucm.es
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