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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 the market which is “locked-in” by the switching costs. When switching … costs are low, firms face a tradeoff between charging a high price to their locked in customers, or pricing aggressively in …
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The paper inquires whether a public eco-label mitigatesadverse selection, where an ecologically superior (green) product variant is underprovided. A model, integrating entry into a perfectly competitive, vertically differentiated industry and rationally expected quality structure (REQS) under...
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