Measuring consumer switching costs in the television industry

• 成果类型: Article
• 署名作者: Shcherbakov, Oleksandr
• 署名单位: University of Mannheim
• 刊物名称: RAND JOURNAL OF ECONOMICS
• ISSN/ISSBN: 0741-6261
• DOI: 10.1111/1756-2171.12131
• 发表日期: 2016
• 页码: 366-393
• 关键词: discrete-choice models; MARKETS; demand; replacement

摘要

In this article, I develop and estimate a model of dynamic consumer behavior with switching costs in the market for paid-television services. I estimate the parameters of the structural model using data on cable and satellite systems across local US television markets over the period 1992-2006. The results suggest switching costs range from $159 to $242 for cable and from $212 to $276 for satellite providers in 1997 dollars. Using a simple dynamic model of cable providers, I demonstrate that switching costs of these magnitudes can significantly affect the firms' optimal strategies.