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Consumer attitudes towards switching supplier in three deregulated markets

Author

Listed:
  • Gamble, Amelie
  • Juliusson, E. Asgeir
  • Gärling, Tommy

Abstract

The efficiency of deregulated markets is jeopardized by consumers failing to switch supplier to the extent that would be beneficial to them. In order to disentangle the determinants of failures to switch, the present study investigates consumers' motives for negative attitudes towards switching in the deregulated Swedish markets for electricity, landline telecom, and home insurance. Based on the results of a mail survey of a random sample of 458 household consumers, reliable measures were constructed of attitude towards switching supplier, loyalty to the incumbent, information search costs to compare suppliers, and expected economic benefits from switching. A negative attitude towards switching supplier was shown to increase with loyalty, increase with information search costs and decrease with expected economic benefits. Attitude towards switching was more negative in the electricity market than in the other markets and more negative in the landline telecom market than in the home insurance market. The differences between markets were accounted for by differences in loyalty, information search costs, and expected economic benefits.

Suggested Citation

  • Gamble, Amelie & Juliusson, E. Asgeir & Gärling, Tommy, 2009. "Consumer attitudes towards switching supplier in three deregulated markets," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 38(5), pages 814-819, October.
  • Handle: RePEc:eee:soceco:v:38:y:2009:i:5:p:814-819
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    References listed on IDEAS

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    1. Paul Klemperer, 1987. "Markets with Consumer Switching Costs," The Quarterly Journal of Economics, Oxford University Press, vol. 102(2), pages 375-394.
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    Citations

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    Cited by:

    1. Vesterberg, Mattias, 2017. "The effect of price on electricity contract choice," Umeå Economic Studies 941, Umeå University, Department of Economics.
    2. Xiaoping He & David Reiner, 2015. "Why Do More British Consumers Not Switch Energy Suppliers? The Role of Individual Attitudes," Cambridge Working Papers in Economics 1525, Faculty of Economics, University of Cambridge.
    3. Carin Cruijsen & Maaike Diepstraten, 2017. "Banking Products: You Can Take Them with You, So Why Don’t You?," Journal of Financial Services Research, Springer;Western Finance Association, vol. 52(1), pages 123-154, October.
    4. repec:eee:eneeco:v:69:y:2018:i:c:p:59-70 is not listed on IDEAS
    5. Iweta Opolska, 2016. "Liberalisation of the gas industry in Europe.Does the European Union support efficacious regulatory solutions?," Ekonomia journal, Faculty of Economic Sciences, University of Warsaw, vol. 44.
    6. Sauthoff, Saramena & Danne, Michael & Mußhoff, Oliver, 2017. "To switch or not to switch? Understanding German consumers' willingness to pay for green electricity tariff attributes," DARE Discussion Papers 1707, Georg-August University of Göttingen, Department of Agricultural Economics and Rural Development (DARE).
    7. repec:aen:journl:ej38-6-xiaoping is not listed on IDEAS
    8. Peter D., Lunn & Sean, Lyons, 2017. "Consumer switching intentions for telecoms services: evidence from Ireland," MPRA Paper 77412, University Library of Munich, Germany.
    9. Maxim Alexandru, 2013. "Methodological Considerations Regarding The Segmentation Of Household Energy Consumers," Annals of Faculty of Economics, University of Oradea, Faculty of Economics, vol. 1(1), pages 1775-1785, July.
    10. repec:eee:juipol:v:48:y:2017:i:c:p:12-21 is not listed on IDEAS
    11. Vassileva, Iana & Wallin, Fredrik & Dahlquist, Erik, 2012. "Understanding energy consumption behavior for future demand response strategy development," Energy, Elsevier, vol. 46(1), pages 94-100.
    12. Pick, Doreén & Zielke, Stephan, 2015. "How electricity providers communicate price increases – A qualitative analysis of notification letters," Energy Policy, Elsevier, vol. 86(C), pages 303-314.
    13. repec:eee:enepol:v:110:y:2017:i:c:p:675-685 is not listed on IDEAS
    14. Yang, Yingkui, 2014. "Understanding household switching behavior in the retail electricity market," Energy Policy, Elsevier, vol. 69(C), pages 406-414.

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