In this article, we estimate the price elasticities of demand for subscription and consumer switching costs for mobile telephony. We use a panel of Portuguese consumer level data to estimate a series of multinomial and mixed logit models. The demand for subscription is elastic. Switching costs are large. We use the structural model to perform several policy exercises. Switching costs and brand ...

Some recent contributions have studied equilibrium ex ante investments by buyers and sellers, followed by matching and bargaining over the match surplus, with diverse findings. This paper sets up a simple model with both matching frictions and costs of switching bargaining partners, which encompasses existing contributions. We show that when switching costs are zero, in the limit as matching fr...

This paper examines the use of switching costs by long-lived strategic buyers to manage dynamic competition between rival suppliers. The analysis reveals how buyers may employ switching costs to their advantage. We show when switching costs are high a buyer may induce suppliers to price more competitively by credibly threatening to replace the incumbent supplier with his rivals. The implication...

a non-profit institution devoted to research on network industries, electronic commerce, telecommunications, the Internet, " virtual networks " comprised of computers that share the same technical standard or operating system, and on network issues in general. Abstract This research examines the impact of switching costs on vendor choice in the market for routers and switches. We show that desp...

The double-cued task switching procedure has recently been introduced as a new way to measure externally cued switch costs. In the present individual differences study, two hundred fifty young adults completed measures of task switching, inhibition, and long-term memory. A latent variable approach was taken to examine the relationships among these cognitive measures. Decomposing the externally ...

This paper studies a discrete-time optimal switching problem on a finite horizon. The underlying model has a running reward, terminal reward and signed (positive and negative) switching costs. Using the martingale approach to optimal stopping problems, we extend a well known explicit dynamic programming method for computing the value function and the optimal strategy to the case of signed switc...

The conventional wisdom in economic theory holds that switching costs make markets less competitive. This paper challenges this claim. We formulate an empirically realistic model of dynamic price competition that allows for differentiated products and imperfect lock-in. We calibrate this model with data from frequently purchased packaged goods markets. These data are ideal in the sense that the...

Previously, personalized service was provided by traditional channel. Now, they are available online by using web channel. Some unique features of a web channel make it different from a traditional channel. Previous research has studied the competition between a web channel and a traditional channel from various angles. In this paper, we develop a model to examine the impact of switching costs ...

Retaining users and facilitating their continuance usage are essential for mobile service providers to increase both revenues and profits. This research integrates the perspectives of network externality and switching costs to propose a model for investigating the continuance usage of mobile instant messaging services. Network externality arises from both direct and indirect sources and is conc...