Markets with Consumer Switching Costs and Non-Linear Pricing.

In a non-cooperative oligopoly model where firms use simple linear prices, Klemperer (1987) has shown that the existence of consumers’ switching costs may generate monopoly like prices, and thereby create substantial loss in welfare. We show that when allowing firms to use two-part tariffs, social optimal prices are always set and the size and distribution of switching costs only affect the distribution of surplus between fims and consumers.

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Year of publication:	2002-03-13
Authors:	Gabrielsen, Tommy Staahl ; Vagstad, Steinar
Institutions:	Institutt for Økonomi, Universitetet i Bergen
Subject:	switching costs \| non-linear pricing \| duopoly

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Extent:	application/pdf
Series:	Working Papers in Economics.
Type of publication:	Book / Working Paper
Notes:	The text is part of a series Working Papers in Economics Number 04/02 7 pages
Classification:	D44 - Auctions ; D82 - Asymmetric and Private Information ; L10 - Market Structure, Firm Strategy, and Market Performance. General ; L51 - Economics of Regulation
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10008914345