TY - JOUR
T1 - Bounded rationality and consumer choice
T2 - an evaluation of consumer choice of mobile bundles
AU - Miao, Miao
AU - Jayakar, Krishna
N1 - Funding Information:
This work was supported by the Fundamental Research Funds for the Central Universities [grant number: A0920502051113], National Social Science Foundation of SiChuan [grant number: LYM11-12] and the National Social Science Foundation of Ministry of Education [grant number: 10XJC79000].
Funding Information:
Miao Miao is a lecturer at the School of Economics and Management at Southwest Jiaotong University, China. Her research focuses on e-commerce, mobile payment, and affections of new ICTs. She has received grants from agencies, such as the Chinese Humanities and Social Science Fund and the Ministry of Education Central University Research Fund. She has undergraduate and Master’s degrees in Computer Science from the University of Science and Technology of Beijing, as well as a PhD in Management from Southwest Jiaotong University.
PY - 2014/4
Y1 - 2014/4
N2 - Although numerous prior studies have examined consumer valuations in bundling transactions from a theoretical perspective, relatively few have focused on large datasets. In addition, little prior research has targeted developing telecommunication markets. To address these gaps in the literature, we examine the rationality of consumers' bundling choices in the mobile telecommunication industry, using operational data from China Telecom. We compare the current prices paid by consumers to the optimal prices of alternative bundling plans, based on the consumers' actual usage. We determine whether bundling choice is affected by risk aversion, the complexity of the bundle, and learning effects. The findings suggested that many users chose sub-optimal bundles that were more expensive than others were. The results showed that consumers were risk averse, and they were more likely to make non-optimal bundle selections with more complex usage patterns. No significant differences were found according to gender, age, or usage level.
AB - Although numerous prior studies have examined consumer valuations in bundling transactions from a theoretical perspective, relatively few have focused on large datasets. In addition, little prior research has targeted developing telecommunication markets. To address these gaps in the literature, we examine the rationality of consumers' bundling choices in the mobile telecommunication industry, using operational data from China Telecom. We compare the current prices paid by consumers to the optimal prices of alternative bundling plans, based on the consumers' actual usage. We determine whether bundling choice is affected by risk aversion, the complexity of the bundle, and learning effects. The findings suggested that many users chose sub-optimal bundles that were more expensive than others were. The results showed that consumers were risk averse, and they were more likely to make non-optimal bundle selections with more complex usage patterns. No significant differences were found according to gender, age, or usage level.
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U2 - 10.1080/17544750.2014.905869
DO - 10.1080/17544750.2014.905869
M3 - Article
AN - SCOPUS:84900026625
SN - 1754-4750
VL - 7
SP - 191
EP - 211
JO - Chinese Journal of Communication
JF - Chinese Journal of Communication
IS - 2
ER -