The effect of shortening lock-in periods in telecommunication services

Baojiang Yang, Miguel Godinho de Matos, Pedro Ferreira

Resultado de pesquisarevisão de pares

1 Citação (Scopus)

Resumo

In this research note, we study the welfare implications of shortening the length of the lock-in period associated with triple play contracts using household level data, from a large telecommunications provider, for a period of 6 months. Using a multinomial logit model to explain consumer behavior we show that, in our setting, shortening the length of the lock-in period decreases the aggregated profit of the firms in the market more than it increases consumer surplus. This result arises because shortening the length of the lock-in period increases churn, and the costs to set up service for the consumers that churn and join a new carrier supersede the increase in the consumers' willingness to pay for service when the length of the lock-in period shortens.
Idioma originalEnglish
Páginas (de-até)1391-1409
Número de páginas12
RevistaMIS Quarterly: Management Information Systems
Volume44
Número de emissão3
DOIs
Estado da publicaçãoPublicado - set 2020

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