摘要：The cellular service market is an economically significant market
that has substantially increased consumer welfare. From 1990 to 2008,
the U.S. market grew from 5 million subscribers to 263 million sub-
scribers. Eighty-six percent of Americans have a cell phone, and an
increasing number of households rely entirely on wireless communi-
cations, giving up landlines altogether. Annual revenues of the four
national carriers — AT&T, Verizon, Sprint, and T-Mobile — total
over $150 billion. Our focus, however, is on the failures of this mar-
ket. We argue that the carriers design their contracts in response to
systemic mistakes and misperceptions of their customers. In doing so
they impose welfare costs on consumers, reducing the net benefit that
consumers derive from wireless service. We focus on three design
features common to most cellular service contracts: three-part tariffs,
lock-in clauses, and sheer complexity.
