Switching costs are prevalent in network industries, and this paper investigates their effects on market outcome. I find that the role of switching costs depends on network effects and the outside option. Without a viable outside option, high switching costs can neutralize the tendency towards market dominance associated with network effects, but with a viable outside option, switching costs fa...

When new technology is introduced through an upgrade from or a replacement of an existing system, switching costs can be an important factor influencing the adoption of the new system. Recent research has identified several categories of switching costs including: uncertainty costs, emotional costs, learning costs, reduced performance costs, and sunk costs. A substantial amount of literature su...

Recent research has increasingly examined customer switching costs in regards to antecedents and relational outcomes. This study extends current research by testing a framework for understanding the underlying relationships between perceived service quality, switching costs, and customer satisfaction with a service provider. The findings of this study suggest that there is a significant and pos...

In many markets, there are switching costs and network effects. Yet the literature generally deals with them separately. This paper bridges the gap by analyzing their interaction (or “indirect bargain”) in a dynamic two-sided market. It shows that in the symmetric equilibrium, the classic result that the first-period price is U-shaped in switching costs does not emerge, but instead switching co...

I investigate the e¤ects of switching costs on the market outcome in network industries using a dynamic duopoly model of price competition in the presence of an outside option. I …nd that the role of switching costs depends on network e¤ects and the outside option. Without a viable outside option, high switching costs can neutralize the tendency towards high market concentration associated with...

Recently there has been a chorus of competition complaints asserting that Google's conduct and position today is parallel to Microsoft's position in the “Microsoft case,” the antitrust case brought by the Department of Justice in 1998. Any monopolization case against Google Search would have to be very different from the Microsoft browser case, because the cost for a user switching from Google ...

Today’s businesses environment is forcing companies to become increasingly more efficient in applying Internet technology to conduct transactions. AS the possibility of infection by computer virus is much greater now than ever before, businesses search for appropriate corporate antivirus software to safeguard their computer systems. This paper considers corporate antivirus software switching as...

IT outsourcing contracts are often discontinued in favor of other alternatives (returning to in-house development, or switching to another vendor). Switching costs are experienced when terminating a business relationship and securing an alternative. We tried to answer the question: do switching costs matter significantly in the strategic choice to continue outsourcing, switch vendors, or backso...