Markets with Consumer Switching Costs

S-Tier
Journal: Quarterly Journal of Economics
Year: 1987
Volume: 102
Issue: 2
Pages: 375-394

Score contribution per author:

8.043 = (α=2.01 / 1 authors) × 4.0x S-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

Ex ante homogeneous products may, after the purchase of one of them, be ex post differentiated by switching costs including learning costs, transaction costs, or "artificial" costs imposed by firms, such as repeat-purchase discounts. The nonco-operative equilibrium in an oligopoly with switching costs may be the same as the collusive outcome in an otherwise identical market without switching costs. However, the prospect of future collusive profits leads to vigorous competition for market share in the early stages of a market's development. The model thus explains the emphasis placed on market share as a goal of corporate strategy.

Technical Details

RePEc Handle
repec:oup:qjecon:v:102:y:1987:i:2:p:375-394.
Journal Field
General
Author Count
1
Added to Database
2026-01-25