Consumer Heterogeneity and Pricing in a Duopoly with Switching Costs

Tommy Staahl Gabrielsen () and Steinar Vagstad ()

Norway; Department of Economics, University of Bergen from Department of Economics, University of Bergen

Abstract: It is well-known that switching costs may facilitate monopoly pricing in a market with price competition between two suppliers of a homogenous good, provided the switching cost is above some critical level. With heterogeneous consumers monopoly pricing entails second degree price dierentiotation with inecient contracts for low demand types. We show that introducing con- sumer heterogeneity may increase the critical switching cost needed to sustain a pure-strategy equilibrium involving monopoly pricing.

Keywords: PRICING; COSTS; CONSUMERS; COMPETITION (search for similar items in EconPapers)
JEL-codes: E31 E64 L13 (search for similar items in EconPapers)
Date: 2001
View citations in EconPapers

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
Working Paper: Consumer Heterogeneity and Pricing in a Duopoly with Switching Costs (2000)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: http://EconPapers.repec.org/RePEc:fth:bereco:0801

Access Statistics for this paper

More papers in Norway; Department of Economics, University of Bergen from Department of Economics, University of Bergen
Address: Department of Economics, University of Bergen Fosswinckels Gate 6. N-5007 Bergen, Norway
Contact information at EDIRC.
Series data maintained by Thomas Krichel ().