Determinants of Contract Plan Choice

Service providers frequently offer contract plans and bind consumers for the time of the con-tract length in return for a price discount. These contract plans differentiate between consum-ers who wish to stay flexible and those who are willing to commit to the service provider for the time of the contract length. for the right implementation of contract plans, knowledge about the determinants of consumers’ choice of contract plans is crucial. In an empirical study, we identify these determinants and use a discrete choice experiment to analyse their influence on contract plans’ choice. While factors such as convenience or expectations about future changes on the market do not have an impact at all, we find that interest, flexibility, and price discounts strongly impact consumers’ choice of contract plans and should be considered when implementing contract plans.