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Attracting the Rival’s Customers in a Model with Switching Costs

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  • Jeong‐Yoo Kim
  • Dong‐Hee Koh

Abstract

We consider the option of a firm’s honouring the rival’s coupons in a duopoly model in which products are differentiated by both characteristics and a switching cost. A firm may honour its rival’s coupons to increase its market share only if its previous market share is less than one‐half but not too low and, as a result, the market share is increased but only up to one‐half. JEL Classification Number: D13.

Suggested Citation

  • Jeong‐Yoo Kim & Dong‐Hee Koh, 2002. "Attracting the Rival’s Customers in a Model with Switching Costs," The Japanese Economic Review, Japanese Economic Association, vol. 53(1), pages 134-139, March.
    • Handle: RePEc:bla:jecrev:v:53:y:2002:i:1:p:134-139
    DOI: 10.1111/1468-5876.00217
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    Cited by:

    1. Kim, Jeong-yoo & Park, Jihoon, 2018. "Gift cards or vouchers as a collusive device," Economics Discussion Papers 2018-76, Kiel Institute for the World Economy (IfW Kiel).
    2. Berg, Nathan & Kim, Jeong-Yoo & Park, Jihoon, 2021. "Why do firms sell gift cards although consumers prefer cash to gift cards?," Economic Modelling, Elsevier, vol. 96(C), pages 379-388.

    More about this item

    JEL classification:

    • D13 - Microeconomics - - Household Behavior - - - Household Production and Intrahouse Allocation

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