Purpose – As the well-known Structure-Conduct-Performance paradigm implies, risk structure of a corporation may affect its risk management activity and the activity may in turn determine its performance. Depending on its goal, Foreign Direct Investment (FDI) can shape its risk structure, risk...

There is an ongoing debate on whether cultural goods like movies and music albums should be protected from foreign competitors. An implicit assumption under the argument for protection is that consumers easily substitute cultural elements for other product characteristics. In this paper we...

This paper proposes a simple method for estimating the lock-in effects of switching costs from firm-level data. We compare the behavior of already contracted consumers to the behavior of new consumers as the latter can serve as contrafactual to the former. In panel regressions on firms' incoming...

This paper investigates inertia within and across banks in retail deposit markets using detailed panel data on consumer choices and account characteristics. In a structural choice model, I find that costs of inertia are around one third higher for switching accounts across compared to switching...

Switching costs are generally regarded as anti-competitive as firms can raise prices to "locked-in" consumers, at least up to the cost of switching to a lower-priced alternative. However, there is some evidence, both theoretical and empirical, that tends to show the opposite. Namely, suppliers,...

How do different switching costs affect choices and competition in a private pension system? I answer this question in a setting in which variation in employment status allows me to identify two switching costs that jointly affect enrollees' decisions: the cost of evaluating financial...

Most studies examining the impact of migrants on crime rates in hosting populations are in the context of economic migrants in developed countries. However, we know much less about the crime impact of refugees in low- and middle-income countries-whose numbers are increasing worldwide. This study...

Consumers' health plan choices are highly persistent even though optimal plans change over time. This paper separates two sources of inertia, inattention to plan choice and switching costs. We develop a panel data model with separate attention and choice stages, linked by heterogeneity in...

This article examines the market power of branded prescription drugs faced with generic competition. Using prescription-level and matched socioeconomic panel data of the entire Swedish population between 2010 and 2016, I provide evidence for the key role of switching costs. A discontinuity...

This paper studies consumers' choice between two different water tariffs. We document a large inaction in a novel setting where customers face a binary decision and receive simple, detailed and personalized information about the financial savings they would obtain if they were to switch water...