The role of consumers in competition and competition policy

By M. Waterson. 2001

151 citations recorded by the source corpus.

This paper develops the idea that consumers’ behavior matters significantly from the viewpoint of industry performance. This is examined through some theoretical propositions, but then at greater length by means of some case study examples. These examples demonstrate how, even in potentially competitive industries, reluctance on the part of consumers to search or to switch suppliers can lead to a sub-competitive outcome. The significance of non-traditional competition policy remedies in changing the outcome is drawn out.

Subfields: Economics and Econometrics

View Paper: https://www.semanticscholar.org/paper/c89b19a9fd6f21b72f91fdde509ea7b5423b3c6b

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In Economics and Econometrics

Citations in the corpus

Consumer Choice and Competition Policy: a Study of UK Energy Markets a (2005, methodology): “5 Here we use Willig's (1976) approximation formulae and the facts that on average consumers spend 3% of their income on gas (Office of National Statistics, 2000), consumer surplus from the price change is at most around 20% of the bill and income elasticity of demand is at most 0.”
Coordination and Lock-In: Competition with Switching Costs and Network Effects (2006, unknown): “…featured in a range of significant antitrust cases, including IBM and Kodak; the network effect by which popular operating systems attract applications software supply was central in the US Microsoft case; and both network effects and switching costs are important in the European Microsoft case.”
Regulation, Competition and Liberalization (2005, background): “The requirements should specify clearly what data must be reported, how often it must be reported, and which entities 103 Waterson (2003) discusses the potential merits of requiring customers to choose their supplier annually, along the lines of annual policy renewals that are common in the…”
Maximum Likelihood Estimation of Search Costs (2008, methodology): “…50% and 53% of the value of the product so the average price-cost margins range between 23% and 28%.22 This is of course the consequence of search costs, suggesting that demand side characteristics might be even more important than supply side ones to assess market competitiveness (Waterson, 2003).”
Do Consumers Switch to the Best Supplier (2007, unknown): “…better known effects of switching costs that reduce the willingness of consumers to switch suppliers, such behaviour may seriously impede the competitive process, even after a market has been liberalised or has been made subject to standard competition policy (as recently argued by Waterson 2003).”