Multipart tariffs and bounded rationality: An experimental analysis of mobile phone plan choices

B-Tier
Journal: Journal of Economic Behavior and Organization
Year: 2015
Volume: 116
Issue: C
Pages: 239-253

Score contribution per author:

1.005 = (α=2.01 / 2 authors) × 1.0x B-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

Multipart tariff structures add to the computational challenges in choosing mobile phone connection services. We study the quality of decision making in a laboratory environment where consumers only face a small set of mobile phone plan options but have to contend with different degrees of tariff complexity as well as uncertain usage. Our main finding is that simply eliminating the multipart tariff structure does not necessarily lead to better decisions. Rather it is multipart tariffs with included values in excess of monthly fees, thus entailing two-tier pricing structures with increasing marginal costs, which lead to the worst decisions. Knowledgeable participants, who understand mobile phone plan pricing, make significantly better choices.

Technical Details

RePEc Handle
repec:eee:jeborg:v:116:y:2015:i:c:p:239-253
Journal Field
Theory
Author Count
2
Added to Database
2026-01-25