Markets with Consumer Switching Costs and Non-Linear Pricing

Tommy Gabrielsen and Steinar Vagstad

No 04/02, Working Papers in Economics from University of Bergen, Department of Economics

Abstract: In a non-cooperative oligopoly model where firms use simple linear prices, Klemperer (1987) has shown that the existence of consumers’ switching costs may generate monopoly like prices, and thereby create substantial loss in welfare. We show that when allowing firms to use two-part tariffs, social optimal prices are always set and the size and distribution of switching costs only affect the distribution of surplus between fims and consumers.

Keywords: switching costs; non-linear pricing; duopoly (search for similar items in EconPapers)
JEL-codes: D44 D82 L10 L51 (search for similar items in EconPapers)
Pages: 7 pages
Date: 2002-03-13
References: Add references at CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://ekstern.filer.uib.no/svf/2002/04-02.pdf Full text (application/pdf)

Related works:
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:hhs:bergec:2002_004

Access Statistics for this paper

More papers in Working Papers in Economics from University of Bergen, Department of Economics Institutt for økonomi, Universitetet i Bergen, Postboks 7802, 5020 Bergen, Norway. Contact information at EDIRC.
Bibliographic data for series maintained by Kjell Erik Lommerud ().