Abstract:

Confusing consumers can be profitable for companies, in particular in a competitive market where they can hardly increase their prices without losing their consumers. Ambre Nicolle, Christos Genakos, and Tobias Kretschmer study the UK mobile telecommunications market before the introduction of 4G services - and find evidence that mobile operators decreased the transparency of their mobile plans, creating confusion to consumers and at the same time successfully managed to increase prices.