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Biglaiser, Gary, Crémer, Jacques
and Dobos, Gergely
(2010)
The value of switching costs.
TSE Working Paper, n. 10-142, Toulouse
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Official URL : http://tse-fr.eu/pub/22323
Abstract
We study a dynamic model with an incumbent monopolist and entry in every
subsequent period. We first show that if all consumers have the same switching
cost, then the intertemporal profits of the incumbent are the same as if there
was only one period. We then study the consequences of heterogeneity of
switching costs. We prove that even low switching cost customers have value
for the incumbent: when there are more of them its profits increase as their
presence hinders entrants who find it more costly to attract high switching
cost customers.
| Item Type: | Monograph (Working Paper) |
|---|---|
| Language: | English |
| Date: | 3 February 2010 |
| Place of Publication: | Toulouse |
| Subjects: | B- ECONOMIE ET FINANCE |
| Divisions: | TSE-R (Toulouse) |
| Institution: | Université Toulouse 1 Capitole |
| Site: | UT1 |
| Date Deposited: | 18 Jan 2012 06:01 |
| Last Modified: | 02 Apr 2021 15:36 |
| OAI Identifier: | oai:tse-fr.eu:22323 |
| URI: | https://publications.ut-capitole.fr/id/eprint/3325 |
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