Market Frictions: A Unified Model of Search and Switching Costs

Chris Wilson ()

MPRA Paper from University Library of Munich, Germany

Abstract: Despite the existence of two vast literatures, very little is known about the potential differences or interactions between search and switching costs. This paper demonstrates the benefits of examining the two frictions in unison. First, the paper shows how subtle distinctions between the two costs can provide important differences in their effects upon consumer behaviour and market prices. In many cases, policymakers may prefer to reduce search costs rather than switching costs. Second, the paper illustrates a simple methodology for estimating the magnitude of both costs while demonstrating the potential bias that can arise from a single-cost approach.

Keywords: Search costs; Switching Costs; Market Friction (search for similar items in EconPapers)
JEL-codes: L10 (search for similar items in EconPapers)
Date: 2009-02
New Economics Papers: this item is included in nep-cbe, nep-lab and nep-mic
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (10)

Downloads: (external link)
https://mpra.ub.uni-muenchen.de/13672/1/MPRA_paper_13672.pdf original version (application/pdf)
https://mpra.ub.uni-muenchen.de/26652/1/MPRA_paper_26652.pdf revised version (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:pra:mprapa:13672

Access Statistics for this paper

More papers in MPRA Paper from University Library of Munich, Germany Ludwigstraße 33, D-80539 Munich, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Joachim Winter ().