A Mixed Duopoly with Switching Costs

Jorge Fernández-Ruiz

The Japanese Economic Review, 2019, vol. 70, issue 2, No 5, 235-257

Abstract: Abstract We examine the effects of switching costs in a two-period Hotelling-type model where a profit-maximising private firm competes with a welfare-maximising public firm. We show that, in contrast with the case in which both firms are private, where switching costs raise prices in both periods, in the mixed duopoly they raise prices in the second period but reduce them in the first period. Moreover, the first-period price reduction is of such magnitude that switching costs reduce firms’ profits and raise consumer welfare. We also find that switching costs affect the consequences of privatisation in favour of firms and against consumers.

Keywords: D43; L13; L32 (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://link.springer.com/10.1111/jere.12182 Abstract (text/html)
Access to the full text of the articles in this series is restricted.

Related works:
Journal Article: A Mixed Duopoly With Switching Costs (2019)
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: https://EconPapers.repec.org/RePEc:spr:jecrev:v:70:y:2019:i:2:d:10.1111_jere.12182

Ordering information: This journal article can be ordered from
https://www.springer.com/journal/42973

DOI: 10.1111/jere.12182

Access Statistics for this article

The Japanese Economic Review is currently edited by Michihiro Kandori

More articles in The Japanese Economic Review from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().