Switching Costs and Equilibrium Prices

In a competitive environment, switching costs have two eects. First, they increase the market power of a seller with locked-in customers. Second, they increase competition for new customers. I provide conditions under which switching costs decrease or increase equilibrium prices. Taken together, the suggest that, if markets are very competitive to begin with, then switching costs make them even more competitive; whereas if markets are not very competitive to begin with, then switching costs make them even less competitive. In the above statements, by "competitive" I mean a market that is close to a symmetric duopoly or one where the sellers' discount factor is very high

Tarifas a plazo. El efecto reacción de los mercados eléctricos

Treballs Finals del Màster Universitari d'Economia, Regulació i Competència als Serveis Públics (ERCSP), Facultat d'Economia i Empresa, Universitat de Barcelona, Curs: 2014-2015, Tutor: Joan-Ramon BorrellEn este trabajo se estudia el impacto que tiene la implementación de tarifas reguladas a plazo mediante subastas en mercados eléctricos liberalizados. A priori, los resultados tanto teóricos (basados en juegos repetidos) como empíricos (mediante modelos OLS, IV y ARMAX) parecen apoyar la hipótesis de que este tipo de regulaciones generan incrementos de precios en los períodos previos a la implementación. El punto principal del Trabajo busca hallar qué es lo que motiva a las empresas a “reaccionar” de esta manera

Switching costs in the European postal service. Are there any solutions?

This article examines the costs of switching that may exist in the European postal sector, where it is carried out an ambitious process of opening to competition since 1997. Inadequate regulation of the access to some elements of postal infrastructure or services within the scope of the universal postal service exists. This article proposes adaptations to ensure transparent and non-discriminatory access conditions to elements of postal infrastructure in line with the sectorial directives aimed at strengthening competition in the long term in the postal market. The proposed adaptations focus on services such as postcode systems, address databases, post office boxes, delivery boxes, re-direction and return to sender services. All of them can help reduce the switching cost and thus strengthen competition

Competitive Prices and Asymmetric Cost Behavior for Iraqi Firms: Capacity Utilization as a Moderator

Prior literature on asymmetric cost behavior mainly focuses on internal factors. While information knowledge considers that managers should use both internal and external factors when making strategic cost decisions. In this study, the purpose is to provide an alternative examination that investigates the relationship between asymmetric cost behavior and competitive price as an external competition factor. The results find that cost stickiness is pronounced for firms in an industry competition with managerial optimism, whereas cost anti-stickiness is pronounced for firms in an industry competition with managerial pessimism when managers like to utilize their resources. The findings suggest that the asymmetric cost behavior is affected by competitive price as an external competition factor as well as internal factors, stressing the importance of using cost stickiness model specification to gain insights about managers\u27 pricing decisions

Switching Costs in the European Postal Service. Are There Any Solutions?

[Abstract] This article examines the costs of switching that may exist in the European postal sector, where it is carried out an ambitious process of opening to competition since 1997. Inadequate regulation of the access to some elements of postal infrastructure or services within the scope of the universal postal service exists. This article proposes adaptations to ensure transparent and non-discriminatory access conditions to elements of postal infrastructure in line with the sectorial directives aimed at strengthening competition in the long term in the postal market. The proposed adaptations focus on services such as postcode systems, address databases, post office boxes, delivery boxes, re-direction and return to sender services. All of them can help reduce the switching cost and thus strengthen competition

Switching Costs and Equilibrium Prices

In a competitive environment, switching costs have two eects. First, they increase the market power of a seller with locked-in customers. Second, they increase competition for new customers. I provide conditions under which switching costs decrease or increase equilibrium prices. Taken together, the suggest that, if markets are very competitive to begin with, then switching costs make them even more competitive; whereas if markets are not very competitive to begin with, then switching costs make them even less competitive. In the above statements, by "competitive" I mean a market that is close to a symmetric duopoly or one where the sellers' discount factor is very high

Risk and Competition in the Indonesian Private Banking Market: An Asymmetric Rivalry Within and Between Strategic Groups

This paper tests the interrelationships among risk, competition, and efficiency in the Indonesian private banking industry between 2014 and 2018. We examines asymmetric rivalry within and between strategic groups defined according to the size of their members. We hypothesize that, owing to several forms of group-level effects, including price difference and efficiency, strategic groups comprising large firms expect to experience a large amount of retaliation from firms within their group and accommodation from the group comprising smaller firms. The competition of private banking is dominated by incumbent firm. The risk and efficiency evolved over time enjoyed by incumbent with fat cat taxonomy and quiet life hypothesis. The entrant play lean and hungry strategy in different market segment within strategic group, whereas foreign bank deter incumbent with higher prices to enter between strategic group. The competition of private banking in Indonesia dominated by risk appetite and fragmented marke

Risk and Competition in the Indonesian Private Banking Market: An Asymmetric Rivalry Within and Between Strategic Groups

This paper tests the interrelationships among risk, competition, and efficiency in the Indonesian private banking industry between 2014 and 2018. We examines asymmetric rivalry within and between strategic groups defined according to the size of their members. We hypothesize that, owing to several forms of group-level effects, including price difference and efficiency, strategic groups comprising large firms expect to experience a large amount of retaliation from firms within their group and accommodation from the group comprising smaller firms. The competition of private banking is dominated by incumbent firm. The risk and efficiency evolved over time enjoyed by incumbent with fat cat taxonomy and quiet life hypothesis. The entrant play lean and hungry strategy in different market segment within strategic group, whereas foreign bank deter incumbent with higher prices to enter between strategic group. The competition of private banking in Indonesia dominated by risk appetite and fragmented marke

Competitive Prices and Asymmetric Cost Behavior for Iraqi Firms: Capacity Utilization as a Moderator

Keywords: Asymmetric cost behavior, Competitive prices, Cost stickiness, Industry Competition, Capacity utilization, Iraq Prior literature on asymmetric cost behavior mainly focuses on internal factors. While information knowledge considers that managers should use both internal and external factors when making strategic cost decisions. In this study, the purpose is to provide an alternative examination that investigates the relationship between asymmetric cost behavior and competitive price as an external competition factor. The results find that cost stickiness is pronounced for firms in an industry competition with managerial optimism, whereas cost anti-stickiness is pronounced for firms in an industry competition with managerial pessimism when managers like to utilize their resources. The findings suggest that the asymmetric cost behavior is affected by competitive price as an external competition factor as well as internal factors, stressing the importance of using cost stickiness model specification to gain insights about managers' pricing decisions