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An empirical analysis of switching cost in the smartphone market in South Korea

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  • Park, Yuri
  • Koo, Yoonmo

Abstract

Switching cost is an important factor for policy makers to consider because it sets a higher price for locked-in consumers by making the market less competitive. Though there has been some empirical research analyzing switching costs in the mobile telecommunications market, studies considering the characteristics of smartphones, which have their own operating systems and applications, are still rare. In this study, we conduct a hypothetical conjoint survey to analyze switching cost in the smartphone handset market and derive the cost by using the hierarchical Bayesian multinomial logit model to consider respondents׳ heterogeneity. Switching costs of handsets and OS are empirically estimated, and the magnitudes depend on the levels of searching cost, learning cost, and uncertainty when purchasing new smartphones.

Suggested Citation

  • Park, Yuri & Koo, Yoonmo, 2016. "An empirical analysis of switching cost in the smartphone market in South Korea," Telecommunications Policy, Elsevier, vol. 40(4), pages 307-318.
  • Handle: RePEc:eee:telpol:v:40:y:2016:i:4:p:307-318
    DOI: 10.1016/j.telpol.2016.01.004
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    References listed on IDEAS

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    Cited by:

    1. Kim, Junghun & Lee, Hyunjoo & Lee, Jongsu, 2020. "Smartphone preferences and brand loyalty: A discrete choice model reflecting the reference point and peer effect," Journal of Retailing and Consumer Services, Elsevier, vol. 52(C).

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