Heterogenous switching costs

Crémer, Jacques, Gary Biglaiser and Gergely Dobos

No 9809, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: We consider a simple two period model where consumers have different switching costs. Before the market opens, there was an incumbent who sold to all consumers. We identify the equilibrium both with Stackelberg and Bertrand competition and show how the presence of low switching cost consumers benefits the incumbent, despite the fact that it never sells to any of them.

Keywords: Switching; cost (search for similar items in EconPapers)
JEL-codes: D43 L13 (search for similar items in EconPapers)
Date: 2014-02
New Economics Papers: this item is included in nep-com
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Citations: View citations in EconPapers (1)

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