Changing the Numbers: UK Directory Enquiries Deregulation and the Failure of Choice

A couple of weeks ago I was back at City University’s Centre for Competition and Regulatory Policy for their winter workshop to present a new paper. Entitled Changing the Numbers: UK Directory Enquiries Deregulation and the Failure of Choice it looked at what happened when the UK deregulated its directory enquiries market in the early 2000s. From the abstract:

In 2003, the UK `liberalised’ its telephone directory enquiries service with the aim of introducing competition so as to improve quality and lower costs. Unfortunately the results did not match expectations. Proliferation of numbers led to consumer confusion and high price firms with no discernible quality advantages but which employed heavy advertising came to dominate the market. Consumer and total welfare appear to have declined. This example raises important questions for regulators. In particular, with limits on information and rationality, it may sometimes be better to limit choice but increase competition to supply that choice.

Link to Paper

4 thoughts on “Changing the Numbers: UK Directory Enquiries Deregulation and the Failure of Choice

  1. Perry de Havilland

    “In particular, with limits on information and rationality…”

    Which of course applies to regulators as well, assuming they are mere mortals like everyone else, with the extra added factor of ‘political motivations’ (which could perhaps be included within the ‘limits on rationality’ bit) added to the equation. There is no reason whatsoever for the state to regulate this in any way.

  2. rgrp Post author

    alecmuffet: apologies and the links are fixed (had relative rather than absolute)

    Perry: I agree that regulators also have limits on information and rationality. However, it does seem necessary for there to be some regulatory oversight of this market — at least in its original situation where there was a single monopoly provider (192 operated by BT).

  3. Pingback: A blank slate on political economy | The Enlightened Economist

Leave a Reply