Waterson, Michael, 1950- (2001) The role of consumers in competition and competition policy. Discussion Paper. Coventry: University of Warwick, Department of Economics. (Warwick economic research papers.

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Abstract

This paper develops the idea that consumers’ behaviour 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.

Item Type:	Working or Discussion Paper (Discussion Paper)
Subjects:	H Social Sciences > HC Economic History and Conditions
Divisions:	Faculty of Social Sciences > Economics
Library of Congress Subject Headings (LCSH):	Consumer behavior, Competition -- Great Britain, Public utilities -- Deregulation -- Great Britain
Series Name:	Warwick economic research papers
Publisher:	University of Warwick, Department of Economics
Place of Publication:	Coventry
Date:	July 2001
Number:	No.607
Number of Pages:	27
Institution:	University of Warwick
Status:	Not Peer Reviewed
Access rights to Published version:	Open Access
Version or Related Resource:	Waterson, M. (2003) The role of consumers in competition and competition policy. International Journal of Industrial Organisation, 21, pp. 129-150.
References:	Albaek, S., Mollgaard, P. and Overgaard, P.B. (1997). Government-assisted oligopoly coordination? A concrete case. Journal of Industrial Economics, 45, 429-443. Buccirossi, P. (2000). Demand Rigidity with Search or Switching Costs. Some Unpleasant Results. Mimeo, LEAR, Rome, September. Competition Commission (1999). Summary of The Supply of Petrol, www.competitioncommission.org.uk/reports/265.htm#The State of Competition. Cruickshank, D. (2000). Competition in UK Banking: A report to the Chancellor of the Exchequer. London, The Stationery Office. Department of Trade and Industry (2000). Switching Suppliers; a research study commissioned by the Consumer Affairs Directorate. London, November. Giulietti, M., Waddams Price, C. and Waterson, M. (2000). Redundant regulation? Competition and consumer choices in the residential energy markets, Centre for Management under Regulation Research Paper 00/4, University of Warwick, November. Insurance Statistics Yearbook, (2000) 1989-1999. London, Association of British Insurers. Klemperer, P. (1995). Competition when consumers have switching costs: An overview with applications to industrial organization, macroeconomics and international trade. Review of Economic Studies, 62, 515-539. Lynch, J.G. and Ariely, D. (2000). Wine Online: Search Costs Affect Competition on Price, Quality,and Distribution. Marketing Science 19, 83-103. Monopolies and Mergers Commission (1975). Contraceptive Sheaths. HC135, 1974-75, London, HMSO. Monopolies and Mergers Commission (1982). Contraceptive Sheaths. Cmnd 8689, London HMSO. Monopolies and Mergers Commission (1990). The Supply of Petrol. Cm972, London HMSO. Monopolies and Mergers Commission (1994). Contraceptive Sheaths. Cm2529, London HMSO. Moshin, N. and Shachar, R. (2000). Switching costs or search costs? Mimeo, Eitan Berglas School of Economics, Tel Aviv, January. OFGEM (1999). Prepayment meters: a consultation document, OFGEM October. OFGEM (2001). How many people are changing supplier? available at www.ofgem.gov.uk/prices/switching.htm
URI:	http://wrap.warwick.ac.uk/id/eprint/34

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