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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Year of publication:	2014
Authors:	Biglaiser, Gary ; Crémer, Jacques ; Dobos, Gergely
Publisher:	Munich : Center for Economic Studies and ifo Institute (CESifo)
Subject:	switching cost

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Series:	CESifo Working Paper ; 4587
Type of publication:	Book / Working Paper
Type of publication (narrower categories):	Working Paper
Language:	English
Other identifiers:	77715756X [GVK] hdl:10419/93452 [Handle] repec:ces:ceswps:_4587 [RePEc]
Classification:	D43 - Oligopoly and Other Forms of Market Imperfection ; L13 - Oligopoly and Other Imperfect Markets
Source:	EconStor

Persistent link: https://www.econbiz.de/10010333432