A reduction in search costs is generally believed to make markets more competitive. However, the effect may be mitigated or amplified if consumers must pay costs for switching products. This paper investigates how search costs affect prices in the presence of switching costs using U.S. domestic...

By making new product preannouncements (NPP) firms encourage consumers to postpone purchase and wait for the firms' new product that in turn cannibalizes current sales, both own and competitor's. Profitability of NPP depends on which firm's sales are cannibalized and relative margins on current...

Under the context of a dynamic oligopoly model of entry and exit with two firms, we analytically derive a set of sufficient conditions for deterrence-motivated entry. In particular, the conceptual framework we present yields a set of testable hypotheses that can be conducted using inferred...

In communication, information, and other industries, three-part tariffs are increasingly popular. A three-part tariff is defined by an access price, an allowance, and a marginal price for any usage in excess of the allowance. Empirical nonlinear pricing studies have focused on consumer choice...

Studies of competition when information on actual firm costs is unavailable require consistent estimates of long run demand price-elasticities. When consumers stockpile, traditional static discrete-choice models overestimate long-term price responses. In this paper, we develop a dynamic model of...

Consumers commonly face purchasing costs, e.g., travel- or wait-time, that are fixed to quantity but increase with variety. This article investigates the impact of such costs on demand and supply of variety. Purchasing costs limit demand for variety like prices limit demand for quantity. When...

Microcredit interest costs remain higher than those of commercial banks in spite of significant donor funds, largely owing to transaction costs relative to small loan sizes. With the rise of Web 2.0 and online social interactivity, can these transaction costs be reduced through peer to peer...

A national survey of firms that participated in outsourcing relationships was conducted, and service quality and relationship quality were found to be significantly and positively related to each other and both had a significant impact on user satisfaction. However, the intricacies of the causal...

What is the relationship between innovation and firm value? Does the type of innovation make a difference? To answer these questions, the authors examine how breakthrough and incremental innovations affect three different facets of firm performance: normal profits, economic rents, and total firm...