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How can consumer power be harnessed to improve market outcomes? - Which? briefing

A briefing on the use of “demand-side remedies” that seek to improve consumer engagement in markets

At Which?, we know that the power of consumers can shape markets and give businesses the incentives to deliver excellent products and services at competitive prices, and provide high-quality after-sales service. However, in many markets consumers seem to have the opportunity to engage but do not do so in sufficient numbers to drive good outcomes. This is likely due to a variety of reasons, from a simple lack of information to barriers that companies might put in place that discourage customers from switching.

Competition authorities and regulators have tried to tackle these issues in a variety of
ways. Over the last 15 years we have seen several attempts to improve the “demand-side” of many markets, ranging from providing information (sometimes in standardised formats) to auto-enrolment of consumers in workplace pensions. Some of these interventions have been successful but in other cases have been simply ineffective and costly for businesses to implement. In the worst cases interventions have even been harmful, sometimes in surprising ways. We therefore decided to look at the evidence on remedies which have worked and which haven’t to see what we could learn.

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Which? Briefing - How can consumer power be harnessed to improve market outcomes? 114 Kb