Switching Costs or Search Costs?

N. Moshkin and R. Shachar

Working Papers from Tel Aviv

Abstract: One of the most significant and robust characteristics of decision making is persistence. An example of this is brand loyalty -- the repeat purchase of new products of the same brand. This paper attempts to show that previous explanations of this phenomenon (switching costs, habit and unobserved heterogeneity) are incomplete, and presents another explanation, namely that individuals possess asymmetric information about their alternatives and are faced with search costs.

Keywords: ASYMETRIC INFORMATION; COSTS; ECONOMIC MODELS; CONSUMPTION; BEHAVIOUR (search for similar items in EconPapers)
JEL-codes: C51 D83 L00 (search for similar items in EconPapers)
Date: 2000
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Persistent link: https://EconPapers.repec.org/RePEc:fth:teavfo:3-2000

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