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The efficiency of market-assisted choice: an experimental analysis of mobile phone connection service recommendations

Published online by Cambridge University Press:  10 April 2017

PETER E. EARL ,
LANA FRIESEN  and
CHRISTOPHER SHADFORTH
PETER E. EARL*
Affiliation:
School of Economics, University of Queensland, St Lucia, QLD4072, Australia
LANA FRIESEN
Affiliation:
School of Economics, University of Queensland, St Lucia, QLD4072, Australia
CHRISTOPHER SHADFORTH
Affiliation:
School of Economics, University of Queensland, St Lucia, QLD4072, Australia
*
*Email: p.earl@uq.edu.au
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Abstract

This paper reports an experiment in which participants were allowed an hour to find the cheapest mobile phone plan for a specific usage remit and were given either (a) access to an offline archive of provider websites or (b) access to the Internet. They were required to think aloud, and recordings were made of what they said and what transpired on their computer screens. Access to comparison sites and other market institutions resulted in significantly cheaper plans being selected on average. Within the group of online subjects, excess costs of recommended plans were inversely related to the time spent using market institutions. Although the designs of comparison websites sometimes hampered decision making, outcomes were generally enhanced by the ability to use these online market institutions.

Type
Research Article
Information
Journal of Institutional Economics , Volume 13 , Issue 4 , December 2017 , pp. 849 - 873
Copyright
Copyright © Millennium Economics Ltd 2017 

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