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Enhancing market power by reducing switching costs

  • Bouckaert, Jan
  • Degryse, Hans
  • Provoost, Thomas

A proportional decrease in switching costs increases competition and social welfare. However, a lump-sum decrease in switching costs softens competition and does not invariably increase social welfare.

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Article provided by Elsevier in its journal Economics Letters.

Volume (Year): 109 (2010)
Issue (Month): 2 (November)
Pages: 131-133

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Handle: RePEc:eee:ecolet:v:109:y:2010:i:2:p:131-133
Contact details of provider: Web page: http://www.elsevier.com/locate/ecolet

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  1. Stefan Buehler & Justus Haucap, 2003. "Mobile Number Portability," SOI - Working Papers 0303, Socioeconomic Institute - University of Zurich, revised Jul 2003.
  2. Farrell, Joseph & Klemperer, Paul, 2006. "Coordination and Lock-In: Competition with Switching Costs and Network Effects," Competition Policy Center, Working Paper Series qt9n26k7v1, Competition Policy Center, Institute for Business and Economic Research, UC Berkeley.
  3. Jan Bouckaert & Hans Degryse, 2004. "Softening Competition by Inducing Switching in Credit Markets," Journal of Industrial Economics, Wiley Blackwell, vol. 52(1), pages 27-52, 03.
  4. Yongmin Chen, 1997. "Paying Customers to Switch," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 6(4), pages 877-897, December.
  5. Fershtman, C. & Gandal, N., 1991. "Disadvantageous Semicollusion," Papers 37-91, Tel Aviv.
  6. Erland Nier & Celine Gondat-Larralde, 2004. "The Microeconomics Of Retail Banking - An Empirical Analysis Of The UK Market For Personal Current Accounts," Royal Economic Society Annual Conference 2004 110, Royal Economic Society.
  7. Garcia Marinoso, Begona, 2001. "Technological Incompatibility, Endogenous Switching Costs and Lock-In," Journal of Industrial Economics, Wiley Blackwell, vol. 49(3), pages 281-98, September.
  8. Buehler, Stefan & Dewenter, Ralf & Haucap, Justus, 2006. "Mobile number portability in Europe," Telecommunications Policy, Elsevier, vol. 30(7), pages 385-399, August.
  9. Shy, Oz, 2002. "A quick-and-easy method for estimating switching costs," International Journal of Industrial Organization, Elsevier, vol. 20(1), pages 71-87, January.
  10. Klemperer, Paul D, 1987. "Entry Deterrence in Markets with Consumer Switching Costs," Economic Journal, Royal Economic Society, vol. 97(388a), pages 99-117, Supplemen.
  11. Viard, V. Brian, 2005. "Do Switching Costs Make Markets More or Less Competitive? The Case of 800-Number Portability," Research Papers 1773r3, Stanford University, Graduate School of Business.
  12. Klemperer, Paul, 1987. "Markets with Consumer Switching Costs," The Quarterly Journal of Economics, MIT Press, vol. 102(2), pages 375-94, May.
  13. Gans, Joshua S. & King, Stephen P. & Woodbridge, Graeme, 2001. "Numbers to the people: regulation, ownership and local number portability," Information Economics and Policy, Elsevier, vol. 13(2), pages 167-180, June.
  14. Kim, Moshe & Kliger, Doron & Vale, Bent, 2003. "Estimating switching costs: the case of banking," Journal of Financial Intermediation, Elsevier, vol. 12(1), pages 25-56, January.
  15. Vasso Ioannidou & Steven Ongena, 2010. ""Time for a Change": Loan Conditions and Bank Behavior when Firms Switch Banks," Journal of Finance, American Finance Association, vol. 65(5), pages 1847-1877, October.
  16. Paul Klemperer & A. Jorge Padilla, 1997. "Do Firms' Product Lines Include Too Many Varieties?," RAND Journal of Economics, The RAND Corporation, vol. 28(3), pages 472-488, Autumn.
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