Attracting the Rival’s Customers in a Model with Switching Costs

Jeong-Yoo Kim and Dong‐Hee Koh

The Japanese Economic Review, 2002, vol. 53, issue 1, 134-139

Abstract: We consider the option of a firm’s honouring the rival’s coupons in a duopoly model in which products are differentiated by both characteristics and a switching cost. A firm may honour its rival’s coupons to increase its market share only if its previous market share is less than one‐half but not too low and, as a result, the market share is increased but only up to one‐half. JEL Classification Number: D13.

Date: 2002
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