The value of switching costs

• 成果类型: Article
• 署名作者: Biglaiser, Gary; Cremer, Jacques; Dobos, Gergely
• 署名单位: University of North Carolina; University of North Carolina Chapel Hill; Centre National de la Recherche Scientifique (CNRS); Universite de Toulouse; Universite Toulouse 1 Capitole; Toulouse School of Economics; Universite de Toulouse; Universite Toulouse 1 Capitole; Toulouse School of Economics
• 刊物名称: JOURNAL OF ECONOMIC THEORY
• ISSN/ISSBN: 0022-0531
• DOI: 10.1016/j.jet.2012.10.010
• 发表日期: 2013
• 页码: 935-952
• 关键词: Switching cost; Dynamic competition; incumbency; entry

摘要

We study a dynamic model with an incumbent monopolist and entry in every subsequent period. We first show that if all consumers have the same switching cost, then the intertemporal profits of the incumbent are the same as if there was only one period. We then study the consequences of heterogeneity of switching costs. We prove that even low switching cost customers have value for the incumbent: when there are more of them its profits increase as their presence hinders entrants who find it more costly to attract high switching cost customers. (C) 2013 Elsevier Inc. All rights reserved.