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
Remplace
Gary Biglaiser, Jacques Crémer et Gergely Dobos, « The value of switching costs », TSE Working Paper, n° 10-142, 3 février 2010, révision 30 octobre 2012.
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.
Voir aussi
Publié dans
Journal of Economic Theory, vol. 148, n° 3, mai 2013, p. 935–952