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Protecting Sticky Consumers in Essential Markets

Author

Listed:
  • Walter Beckert

    (University of London)

  • Paolo Siciliani

    (Bank of England)

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.

Suggested Citation

  • Walter Beckert & Paolo Siciliani, 2022. "Protecting Sticky Consumers in Essential Markets," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 61(3), pages 247-278, November.
    • Handle: RePEc:kap:revind:v:61:y:2022:i:3:d:10.1007_s11151-022-09880-z
    DOI: 10.1007/s11151-022-09880-z
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    More about this item

    Keywords

    Switching costs; Price discrimination; Uniform pricing; Most-favoured customer clauses; Price regulation; Competition;
    All these keywords.

    JEL classification:

    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • D4 - Microeconomics - - Market Structure, Pricing, and Design

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