No abstract

We study consumer inertia in the mobile subscription market, focusing on the decision of whether to switch to a competing provider. To identify the extent of inertia, we exploit price changes faced by 270,000 consumers of a large telecom provider. We document that the propensity to switch provider after the price change increases among consumers whose costs decrease with the new prices. Furthermore, we find that the increase is largest right after consumers are informed of the upcoming change-during the two months prior to the tariff change-as opposed to when the price change is implemented. From these findings, we infer what we call a poking effect; the information of an upcoming price change causes consumers to engage in searches for alternative offers, leading to increased switching. We supplement the analysis with a survey and find indications that the poking effect is due to consumer inattention. To separate the effect on attention from the reaction to the actual price change, we estimate a model of consumer choice with limited attention. We find that when consumers are poked, it increases the share of consumers becoming attentive to competing offers. This leads many consumers to switch providers earlier than they would otherwise, explaining why they leave even though their terms with their current company improve.

This chapter explores how smartphone users understand and navigate digital privacy toward commercial players in a mobile Internet context. The purpose is to gain insight on the interplay between privacy attitudes, knowledge, and actions when connections between individuals and companies are mediated, persistent, and extensive. Such connections have proliferated due to the rapid spread of smartphones among consumers. The authors develop a framework, the privacy awareness grid, to map the relationship between privacy concern and privacy literacy. Then, they present survey results from 2017, based on a total of 3,200 young smartphone users from Norway, Serbia, Malaysia, and Pakistan. They find that the share of privacy-concerned users is high and surprisingly similar across the four surveyed countries, while the share of privacy-literate users varies from 51% in Norway to 1% in Pakistan. Being privacy-literate correlates with privacy concerns, and in particular, few respondents are both privacy-literate and unconcerned. The more privacy-concerned and privacy-literate respondents also take more privacy-protection actions.

No abstract