Infante, Sebátian; Figueroa, Nicolás; Fischer, Ronald - Centro de Economía Aplicada, Universidad de Chile - 2007
We analyze the effects of asymmetric switching costs on two identical firms that produce an homogeneous good and compete in prices. Both firms inherit a fraction of themarket which is “locked-in” by the switching costs. When switching costs are low, firms face a tradeoff between charging a...