Telecommunications - The Consumer Revolution

Lord Young of Graffham, Executive Chairman of Cable & Wireless plc, spoke at the third LSE Business Performance Lecture about the consumer revolution in telecommunications which has transformed the industry. Since liberalisation, the British telecommunications industry has lead its monopolised European counterparts. When Germany licensed one cellular phone operator in the mid-eighties, the British government went for competition and licensed two. Both companies seta target of 100,000 users by 1990. Germany achieved hers; Britain passed a million users. This revolution in the telecommunications industry is timely because information is the lifeblood of service industries and is also increasingly important in modern manufacturing. Imminent technological advances, like the personal communicator, the videophone, and multimedia will increasingly add to its importance.     

Risk Regulation and Consumer Welfare

Health and safety have become major consumer concerns in the 1980s. Major issues focus on who should decide for whom what level of safety and health is appropriate. This paper examines the role of consumers and government in reducing risk. Consideration is given to consumer risk perception and risk response, the need for government intervention, and the various risk evaluation procedures that might be used by government agencies to develop appropriate risk management strategies.     

论反垄断法中的消费者福利保护——以知识经济为背景

消费者福利一直是反垄断法保护的对象。在知识经济时代,反垄断法受到了前所未有的挑战,将保护消费者福利明确定位为反垄断法的终极目的与核心价值,有针对性的制定微观制度与政策,是传统反垄断法因应知识经济时代的必然选择。     

跨国风险分担下福利收益研究述评

经济的周期波动会对消费者收入水平造成某种程度的冲击,而金融市场一体化的演进,却使各国消费者的跨国风险分担成为可能,即通过增持扩张经济体资产或减持衰退经济体资产来规避风险获取收益。学者们对该风险分担所获福利收益的程度持有不同的观点。这主要是因对福利收益的度量方式以及有关参数和随机过程设定的不同而造成的。未来的研究可以考虑将两种分析框架加以整合,在多边框架体制下,通过对禀赋的随机过程进行内生化处理来分析。对跨国风险分担理论进行梳理,有助于人们深化对当前国际金融危机的认识和研究。     

Consumer Welfare and Inefficiency Among Regulated Industries

While the issue of efficiency on the side of production is still not a settled question, it is generally agreed that competition is more conductive to efficiency—both allocative and X—than monopoly. When the monopoly is regulated, i.e., receiving a rate of return less than it would if left unregulated but greater than the market rate of return, both allocative and X-inefficiency result. Since the degree of inefficiency amounts to a tax on consumers, the question of inefficiency in production has a twin companion in the form of consumer welfare losses. This is particularly true for many public utilities upon which low income families spend a large proportion of their income. The quasi tax that the regulated monopolist exacts neither generates a flow of public goods nor increases returns to shareholders. It is a particularly burdensome levy because the rate structure is highly regressive.     

Effects of Joint Outsourcing on Consumer Welfare

This work models outsourcing under oligopolistic competition with nonlinear costs. I show that in a covered market, if each firm’s marginal cost before outsourcing is lower than the industry’s average cost, outsourcing leads to increased prices and decreased consumer welfare. Joint outsourcing is more profitable if the firms’ equilibrium quantity produced is in the economies of scale part of their cost curve.     

Electronic Services Co-Creation Experience: Telecommunications Sector in Tunisia as an Example

Despite the intensive use of the Internet in service delivery, little attention has been paid so far to assessing the impact of the quality of electronic services on the willingness of customers to participate in the co-creation experience online. In order to determine how the consumer reacts to the adoption of new information and communication technologies and, in particular, online telecommunication services, we empirically test the influence of electronic service quality dimensions on the co-creation experience online, integrating the attitude, satisfaction, and intention of the customer. The data were collected from a sample of 263 Tunisian telecommunications customers and analyzed using the structural equation modeling technique. The results show that, even if five dimensions of the quality of the online service positively influence the attitude towards the website, all of the dimensions of the quality of e-services positively influence the e-satisfaction. The results also confirm that customers' attitude towards the website and e-satisfaction positively affect the intention to use the website, which in turn affects the willingness of clients to participate in the experience co-creation online.     

Consumer Response to Telecommunications Deregulation: The Equal Access Decision

This paper examines consumer response to equal access-the choice of a primary long-distance carrier. A model is developed that suggests that those consumers who seek information to aid in decision making may acquire it either through search or experience. The paper reports results of a survey of consumers who recently made the equal access decision. Logit analysis identified search in other purchase decisions and age as two characteristics significantly related to the extent of prepurchase search.     

Consumer Welfare Implications of Changes in Interstate Telephone Pricing

Past practice in regulating telephone prices has encouraged telephone companies to incur excessive costs. The Federal Communications Commission has recently changed some of these practices. In this paper the consumer welfare implications of some of these changes are examined, primarily the institution of interstate subscriber line charges and changes in the procedures for allocating costs among jurisdictions. The conclusion is that these changes serve consumer interests.     

Economics of Consumer Protection: Contributions and Challenges in Estimating Consumer Injury and Evaluating Consumer Protection Policy

Journal of Consumer Policy - The author examines the role of economics in consumer protection, drawing from her experience at the U. S. Federal Trade Commission (FTC), which has a dual mandate to...     

Consumer and Welfare Losses from Milk Marketing Orders

Consumer and welfare losses from milk marketing orders in 1985 including their impact on the sale of reconstituted milk are estimated. Results indicate that consumers pay higher prices for fluid milk and lower prices for manufactured milk products than they would under a competitive system. The net loss in consumer surplus ranges from $621 million to $851 million while the absolute welfare loss ranges from $343 million to $608 million. In addition, existing provisions of milk marketing orders effectively prohibit the use of reconstituted milk, an innovation that could ensure adequate and low cost supplies of fluid milk through the year and have many of the same effects as eliminating milk marketing orders.     

Estimating Consumer Lock-In Effects from Firm-Level Data

This paper proposes a practical method for estimating consumer lock-in effects from firm-level data. The method compares the behavior of already contracted consumers to the behavior of new consumers, the latter serving as a counterfactual to the former. In panel regressions on firms’ incoming and quitting consumers, we look at the differential response to price changes and identify the lock-in effect from the difference between the two. We discuss the potential econometric issues and measurement problems and offer solutions to them. We illustrate our method by analyzing the market for personal loans in Hungary and find strong lock-in effects.     

The Hierarchy of Consumer Participation: Knowledge and Proficiency in Telecommunications Decision Making

This paper establishes a “hierarchy of consumer participation” that has striking parallels to the hierarchy of political involvement developed by Milbrath (1965, 1982). Analysis of consumer decision making required by the deregulation of telecommunications shows that independence of decision making, propensity to use sources of information, and propensity to influence others' decisions are highly interrelated. Four main types of consumers are identified: consumer influentials, active consumers, dependent consumers, and nondecision makers. The levels of consumer participation should be highly salient in defining targets and programs for consumer research, education, protection, and policymaking.     

Estimating Consumer Preferences for Value-Added Fish Products in Oman

Abstract

The European meat industry is confronted with substantial changes of consumer preferences in relation to the type and quantity of meat in everyday diet. One of the main reasons behind these changes is the public impression that meat is a “dangerous” to consume food. This feeling is the result of recent food scares where meat played a central role and their effect on consumers' perceptions about meat safety. The research at hand explores the market potential of organic meat in Greece and emphasizes the perceptions about meat consumption held by organic consumers as opposed to those held by non-consumers of organic foods. It is expected that organic consumers will be more interested in a series of quality attributes of meat commonly found in its organic type, in comparison to non-consumers of organic food. However, the main finding of the survey is that consumer demands in relation to meat quality and safety are particularly high, irrespective of meat's production method. The research concludes that the particularly low consumption of organic meat in Greece should be partially attributed to its insufficient differentiation in consumers' minds.     

Estimating Consumer Losses From Unavailable Advertised Grocery Specials

Supermarkets regularly advertise food specials to provide information on new products and seasonal products, to induce new customers to the store and to retain old customers by good price / quality relationships. But how important are the purchase of advertised food specials to food shoppers? Do they realize significant savings from buying advertised specials? If advertised specials are not available, how much do consumers lose? These questions are addressed in this article through the use of a Monte Carlo simulation, based on a comprehensive conceptual model of the determinants of unavailability.     

Unequal Pricing in the Information Economy: Implications for Consumer Welfare

This article presents an economic analysis of information good pricing and consumer welfare, and discusses the implications of price discrimination in the information economy. It argues that network externalities, coupled with information asymmetry, enable a dominant marketer to price unequally, extracting late adopters surplus to compensate for the loss from early adopters. In the short term, the minority early adopters benefit by paying less, but in the long term, the majority late adopters suffer by paying more. Considering that late adopters are likely to be at a disadvantage in resources, this discriminatory pricing amounts to the poor subsidizing the rich. Based on this analysis, implications for consumer welfare are discussed.     

Consumer Trust,Social Marketing and Ethics of Welfare Exchange

The global corporate scandals such as Enron, Worldcom and Global Crossing have raised fundamental issues of business ethics as well as economic, social and anthropological questions concerning the nature of business competition and global capitalism. The purpose of this conceptual paper is to introduce the concept of “welfare exchange” to the existing notions of economic, social and anthropological notions of business and exchange in markets and society in the 21st century. Global competition and business success in the 21st century continue to raise the nature of economic value and the interaction among diverse actors in international markets, institutions and society. We believe that the nature of such exchange between consumers and organizations, which can also be termed social marketing, need to increasingly take into account a welfare and ethical component. In this paper, we introduce our concept of welfare exchange to emphasize the importance of such welfare and ethical issues in the global business environment of the 21st century.     

Potential Profitability and Decreased Consumer Welfare Through Manufacturers' Cents-Off Coupons

This paper examines the potential increase in oligopolistic manufacturers' profits due to a policy of cents-off couponing and the resulting changes in consumer welfare and resource allocation. This paper offers support to the hypothesis that the observed couponing policies of U.S. manufacturers are motivated by their desire to increase profits through third-degree price discrimination—a practice that results in welfare losses to consumers. While some conclusions reached have been dealt with by other researchers, its approach differs in that it attempts to quantify the probable magnitudes of the welfare effects and profit potential of manufacturers' couponing policies within the framework of a third-degree price discrimination model where firms are assumed to behave as Cournot oligopolists.