Breaking Up Is Hard to Do: Consumer Switching Costs in the U.S. Marketplace for Wireless Telephone Service

Significant evidence suggests that the national wireless carriers strategically pursue and manage a full range of switching cost opportunities. This issue deserves attention from policymakers because markets often become less competitive and consumers generally pay higher prices when firms impose or exploit switching costs. However, in this AARP Public Policy Institute Issue Paper, Christopher A. Baker finds that the use of switching costs as a customer retention tool is a practice that occurs virtually unchecked by the federal agency responsible for ensuring that consumers can switch freely between wireless carriers. (29 pages)

Pub ID: 2007-18

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