G2TT
来源类型Discussion paper
规范类型论文
来源IDDP8849
DP8849 Dynamic Price Competition with Switching Costs
Natalia Fabra
发表日期2012-02-01
出版年2012
语种英语
摘要We develop a continuous-time dynamic model with switching costs. In a relatively simple Markov Perfect equilibrium, the dominant firm concedes market share by charging higher prices than the smaller firm. In the short-run, switching costs might have two types of anti-competitive effects: first, higher switching costs imply a slower transition to a symmetric market structure and a slower rate of decline for average prices; and second, if firms are sufficiently asymmetric, an increase in switching costs also leads to higher current prices. However, as market structure becomes more symmetric, price competition turns fiercer and in the long-run, switching costs have a pro-competitive effect. From a policy perspective, we conclude that switching costs should only raise concerns in concentrated markets.
主题Industrial Organization
关键词Firms' asymmetries Switching costs Continuous-time model Markov-perfect equilibrium
URLhttps://cepr.org/publications/dp8849
来源智库Centre for Economic Policy Research (United Kingdom)
资源类型智库出版物
条目标识符http://119.78.100.153/handle/2XGU8XDN/537682
推荐引用方式
GB/T 7714
Natalia Fabra. DP8849 Dynamic Price Competition with Switching Costs. 2012.
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