Most markets often lack transparency, a phenomenon that extends to markets for digital financial services (DFS)—particularly mobile money—which are characterized by uninformed consumers, shrouded attributes, and hidden prices. This lack of transparency can harm consumers and make the market inefficient, with implications for consumer protection and aggregate welfare. We propose 5 pilot interventions to incentivize competition for price transparency by retail vendors. The work will take place in eastern Ghana. The goals of the pilot are to:
1) develop strong partnerships with providers in the field, including Ghana Statistical Services (GSS)
2) assess the feasibility of the proposed intervention and understand the extent to which agents and consumers respond to incentives for transparency; and
3) evaluate the research design to determine the potential for a full randomized controlled trial (RCT).
If the pilot is successful, we plan to launch a full RCT to answer the following three research questions:
1) RQ1. Do competition incentives promote market transparency?
2) RQ2. Is a market transparency equilibrium stable, and if so, when/how?
3) RQ3. What is the value of a transparent market for mobile money?
Markets for goods and services often lack transparency. A leading and important example is the market for digital financial services (DFS), particularly mobile money which is usually characterized by uninformed consumers, shrouded attributes, and hidden prices. This lack of transparency can harm consumers and make the market inefficient. To address this problem with information disclosure, it is common for DFS providers and regulators to mandate tariff-posting at retail vendor outlets. Yet, enforcement of such transparency policies can be difficult in practice due providers’ limited oversight of and visibility into retail agents.
This study proposes 5 pilot interventions to incentivize competition for price transparency by retail vendors. The work will take place in eastern Ghana.
The main pilot outcome will be a proof-of-concept that assesses
(i) how take-up of incentives to compete for transparency responds to our proposed intervention.
(ii) implementation challenges.
(iii) the potential for a full RCT, including both design and implementation challenges.
- Francis Annan, UC Berkeley
- Peter Quartey, ISSER/UG
- Rachel Pizatella-Haswell, UC Berkeley
- Apoorv Gupta, Datmon Callege