Heterogenous switching costs
We consider a simple two period model where consumers have different switching costs. Before the market opens, there was an incumbent who sold to all consumers. We identify the equilibrium both with Stackelberg and Bertrand competition and show how the presence of low switching cost consumers benefits the incumbent, despite the fact that it never sells to any of them.
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- Biglaiser, Gary & Crémer, Jacques & Dobos, Gergely, 2010.
"The value of switching costs,"
IDEI Working Papers
596, Institut d'Économie Industrielle (IDEI), Toulouse, revised 30 Oct 2012.
- Bouckaert, Jan & Degryse, Hans & Provoost, Thomas, 2010.
"Enhancing market power by reducing switching costs,"
Elsevier, vol. 109(2), pages 131-133, November.
- Jan Bouckaert & Hans Degryse & Thomas Provoost, 2008. "Enhancing Market Power by Reducing Switching Costs," CESifo Working Paper Series 2449, CESifo Group Munich.
- Bouckaert, J.M.C. & Degryse, H.A. & Provoost, T., 2008. "Enhancing Market Power by Reducing Switching Costs," Discussion Paper 2008-91, Tilburg University, Center for Economic Research.
- BOUCKAERT, Jan & DEGRYSE, Hans & PROVOOST, Thomas, 2010. "Enchancing market power by reducing switching costs," Working Papers 2010008, University of Antwerp, Faculty of Applied Economics.
- Paulo Somaini & Liran Einav, 2013. "A Model of Market Power in Customer Markets," Journal of Industrial Economics, Wiley Blackwell, vol. 61(4), pages 938-986, December.
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