Canada’s ‘big 3’ – BCE (‘Bell’), Rogers and Telus – has three quarters of Canadian home internet market. This is in spite of smaller competitors offering the same and better service, cheaper. Why is this?
‘Human nature’ deconstructed here suggest four cognitive biases for this behaviour.
- Over estimate of risk – Risk Aversion. Subscribers worry that switching may leave them worse off.
- Trust in the established order – Authority Bias. Familiarity breeds trust breed liking.
- A misperception that a cheaper price must mean ‘cheap’ service – Halo effect. If you charge less, you can be perceived as worth less.
- Habit and routine – Sunk Cost, Endowment Effect. Inertia and resistance have bases in routines.