The Economy, Stupid Why we don’t shop around (and why companies count on it)
Dec 25, 2025
David Byrne, an economist known for his work on retail pricing, and Megan Flamer, an innovation consultant, dive into why consumers often stick to higher prices. They explore how companies manipulate pricing through coordinated signals, such as weekly price hikes in petrol. The duo discusses the impact of loyalty on consumer choices and reveals surprising findings from their experiments. Plus, they propose tech-driven solutions like AI coaches to help consumers find better deals. Get ready to rethink your shopping habits!
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How A Single Station Sent Price Signals
- David Byrne and colleagues tracked 1.6 million petrol price observations over 15 years in Perth to find pricing patterns.
- They saw firms coordinating on weekly price jumps, often triggered by a single station acting as a price 'signal'.
Prices As A Public Communication Channel
- Public pricing actions can act as non-verbal communication that coordinates firms without direct conversation.
- Competition law struggles to address concerted practices conveyed through observable prices and online monitoring.
Actors Revealed Retailers' Haggling Behavior
- David Byrne ran a call-centre experiment using actors who phoned electricity retailers with scripted profiles.
- Actors posing as shoppers or new movers received consistently better offers when they mentioned switching or quoted competitor prices.