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The efficiency of market-assisted choice: an experimental analysis of mobile phone connection service recommendations

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  • EARL, PETER E.
  • FRIESEN, LANA
  • SHADFORTH, CHRISTOPHER

Abstract

This paper reports an experiment in which participants were allowed an hour to find the cheapest mobile phone plan for a specific usage remit and were given either (a) access to an offline archive of provider websites or (b) access to the Internet. They were required to think aloud, and recordings were made of what they said and what transpired on their computer screens. Access to comparison sites and other market institutions resulted in significantly cheaper plans being selected on average. Within the group of online subjects, excess costs of recommended plans were inversely related to the time spent using market institutions. Although the designs of comparison websites sometimes hampered decision making, outcomes were generally enhanced by the ability to use these online market institutions.

Suggested Citation

  • Earl, Peter E. & Friesen, Lana & Shadforth, Christopher, 2017. "The efficiency of market-assisted choice: an experimental analysis of mobile phone connection service recommendations," Journal of Institutional Economics, Cambridge University Press, vol. 13(4), pages 849-873, December.
    • Handle: RePEc:cup:jinsec:v:13:y:2017:i:04:p:849-873_00
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    Cited by:

    1. Earl, Peter E. & Friesen, Lana & Shadforth, Christopher, 2019. "Elusive optima: A process tracing analysis of procedural rationality in mobile phone connection plan choices," Journal of Economic Behavior & Organization, Elsevier, vol. 161(C), pages 303-322.
    2. Martins, Lurdes & Szrek, Helena, 2019. "The impact of the decision environment on consumer choice of mobile service plans: An experimental examination," Utilities Policy, Elsevier, vol. 56(C), pages 20-32.

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