Référence

Gary Biglaiser, Jacques Crémer et Gergely Dobos, « The value of switching costs », Journal of Economic Theory, vol. 148, n° 3, mai 2013, p. 935–952.

Résumé

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.

Mots-clés

Switching cost; Dynamic competition; Incumbency; Entry;

Codes JEL

  • D43: Oligopoly and Other Forms of Market Imperfection
  • L12: Monopoly • Monopolization Strategies
  • L13: Oligopoly and Other Imperfect Markets

Partenaire de recherche

Orange

Remplace

Gary Biglaiser, Jacques Crémer et Gergely Dobos, « The value of switching costs », IDEI Working Paper, n° 596, 3 février 2010, révision 30 octobre 2012.