Can entire markets strategically confuse consumers to raise prices? This column tracks the prices of nearly all mobile phone tariffs and handsets in the UK from 2010 to 2012, and finds that quality-adjusted prices rise in the early part of the sample period and decline later. Obfuscation strategies by firms appear to be the primary driver, with the rise in prices strongly correlated with the introduction of dominated tariffs - contracts for which cheaper alternatives exist from the same operator. These strategies reduce product transparency, elevating prices not only for dominated tariffs but also for efficient ones, distinguishing the effect from behavioural price discrimination.
Christos Genakos, Tobias Kretschmer and Ambre Nicolle
23 October 2025
Vox EU
https://cepr.org/voxeu/columns/confusopoly-unveiled-how-firms-use-complexity-raise-prices
This work is published under POID and the CEP's Growth programme.
This publication comes under the following CEP theme: Business dynamism