IDEAS home Printed from https://ideas.repec.org/h/spr/oprchp/978-3-642-20009-0_11.html
   My bibliography  Save this book chapter

Smart Entry Strategies for Markets with Switching Costs

In: Operations Research Proceedings 2010

Author

Listed:
  • Florian W. Bartholomae

    (Universität der Bundeswehr)

  • Karl Morasch

    (Universität der Bundeswehr)

  • Rita Orsolya Toth

    (Universität der Bundeswehr)

Abstract

In this paper we consider a market with switching costs that is initially served by a monopolistic incumbent. How can a competitor successfully enter this market? We show that an offer to undercut the incumbent by a fixed margin serves this purpose. This strategy dominates traditional entry where the entrant just offers a lower price because it restrains the ability of the incumbent to block entry by limit pricing. We also consider adding a price ceiling to insure customers against future price increases. This strategy turns out to be the preferable one for entering markets with elastic demand.

Suggested Citation

  • Florian W. Bartholomae & Karl Morasch & Rita Orsolya Toth, 2011. "Smart Entry Strategies for Markets with Switching Costs," Operations Research Proceedings, in: Bo Hu & Karl Morasch & Stefan Pickl & Markus Siegle (ed.), Operations Research Proceedings 2010, pages 65-70, Springer.
    • Handle: RePEc:spr:oprchp:978-3-642-20009-0_11
    DOI: 10.1007/978-3-642-20009-0_11
    as

    Download full text from publisher

    To our knowledge, this item is not available for download. To find whether it is available, there are three options:
    1. Check below whether another version of this item is available online.
    2. Check on the provider's web page whether it is in fact available.
    3. Perform a search for a similarly titled item that would be available.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:spr:oprchp:978-3-642-20009-0_11. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.