Changing the Numbers: UK Directory Enquiries Deregulation and the Failure of Choice
AbstractIn 2003, the UK `liberalised' its telephone directory enquiries service with the aim of introducing competition so as to improve quality and lower costs. Unfortunately the results did not match expectations. Proliferation of numbers led to consumer confusion and high price firms with no discernible quality advantages but which employed heavy advertising came to dominate the market. Consumer and total welfare appear to have declined. This example raises important questions for regulators. In particular, with limits on information and rationality, it may sometimes be better to limit choice but increase competition to supply that choice.
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Bibliographic InfoPaper provided by Faculty of Economics, University of Cambridge in its series Cambridge Working Papers in Economics with number 0916.
Date of creation: 07 Apr 2009
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Competition; Deregulation; Advertising; Bounded Rationality;
Find related papers by JEL classification:
- L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
- L43 - Industrial Organization - - Antitrust Issues and Policies - - - Legal Monopolies and Regulation or Deregulation
This paper has been announced in the following NEP Reports:
- NEP-ALL-2009-04-13 (All new papers)
- NEP-COM-2009-04-13 (Industrial Competition)
- NEP-MKT-2009-04-13 (Marketing)
- NEP-REG-2009-04-13 (Regulation)
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