EconStor >
Heinrich-Heine-Universität Düsseldorf >
Düsseldorf Institute for Competition Economics (DICE), University of Düsseldorf >
DICE Discussion Paper, Düsseldorf Institute for Competition Economics (DICE) >

Please use this identifier to cite or link to this item:

http://hdl.handle.net/10419/51563
  
Title:Irrationality rings! - Experimental evidence on mobile tariff choices PDF Logo
Authors:Barth, Anne-Kathrin
Graf, Julia
Issue Date:2011
Series/Report no.:DICE discussion paper 36
Abstract:This paper investigates why consumers choose calling plans that are not always cost-minimizing. Our approach is twofold: we account for general difficulties facing a tariff choice, as well as for biased preferences. We provide evidence from an experiment among German university students and staff, finding that participants are often not aware of their actual consumption. In line with the findings on at-rate biases, respondents systematically overestimate their consumption. On the other hand, they are generally able and willing to detect optimal tariffs. Furthermore, with increasing usage level, consumers' performance improves. However, some participants hold strong preferences for certain tariff forms, seducing them to choose cost-dominated offers. In our setup, we find that respondents prefer tariffs involving subsidies or hire-purchase options for handsets over contracts with buy now options.
Subjects:Behavioral Economics
Mobile phone tariffs
Handset subsidy
Hire-purchase of device
ISBN:978-3-86304-035-2
Document Type:Working Paper
Appears in Collections:DICE Discussion Paper, Düsseldorf Institute for Competition Economics (DICE)

Files in This Item:
File Description SizeFormat
672345536.pdf478.5 kBAdobe PDF
No. of Downloads: Counter Stats
Download bibliographical data as: BibTeX
Share on:http://hdl.handle.net/10419/51563

Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.