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Strategic confusopoly: evidence from the UK mobile market

Author

Listed:
  • Genakos, Christos
  • Kretschmer, Tobias
  • Nicolle, Ambre
Abstract
Do firms strategically confuse their customers? Using a detailed dataset covering virtually all mobile phone tariffs and their handsets in the UK between January 2010 and September 2012, we examine the co-evolution of prices with the differentiation and overlap of operators' product portfolios. Incorporating the fact that mobile tariffs are multidimensional and hard to compare but easy to imitate and cheap to launch, we argue that firms introduced a large number of dominated tariffs as an obfuscation strategy. We show that the increase in dominated tariffs correlates with the increase in average prices despite converging product portfolios. This exploratory study is one of the first to offer suggestive evidence of the existence and role of obfuscation as a firm strategy.

Suggested Citation

  • Genakos, Christos & Kretschmer, Tobias & Nicolle, Ambre, 2021. "Strategic confusopoly: evidence from the UK mobile market," LSE Research Online Documents on Economics 113835, London School of Economics and Political Science, LSE Library.
    • Handle: RePEc:ehl:lserod:113835
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    File URL: http://eprints.lse.ac.uk/113835/
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    References listed on IDEAS

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    More about this item

    Keywords

    words; competitive strategy; obfuscation; mobile telecommunications industry;
    All these keywords.

    JEL classification:

    • L10 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - General
    • L20 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - General
    • L96 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Telecommunications

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