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Consumer switching costs and private information

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UNSPECIFIED (1999) Consumer switching costs and private information. ECONOMICS LETTERS, 63 (3). pp. 369-375. ISSN 0165-1765.

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Abstract

We consider a standard model of consumer switching costs with demand uncertainty where firms observe private information about demand. Given this private information, each firm forms beliefs over different demand realizations as well as beliefs over the other firm's information. The main result here is that in the first period, if firms observe information suggesting that future demand is Likely to be high, they will price aggressively, sacrificing current profits for higher market share and the expectation of higher future profits. (C) 1999 Published by Elsevier Science S.A. All rights reserved.

Item Type: Journal Article
Subjects: H Social Sciences > HC Economic History and Conditions
Journal or Publication Title: ECONOMICS LETTERS
Publisher: ELSEVIER SCIENCE SA
ISSN: 0165-1765
Official Date: June 1999
Dates:
DateEvent
June 1999UNSPECIFIED
Volume: 63
Number: 3
Number of Pages: 7
Page Range: pp. 369-375
Publication Status: Published

Data sourced from Thomson Reuters' Web of Knowledge

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