Consumer switching costs and private information
UNSPECIFIED. (1999) Consumer switching costs and private information. ECONOMICS LETTERS, 63 (3). pp. 369-375. ISSN 0165-1765Full text not available from this repository.
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|
|Number of Pages:||7|
|Page Range:||pp. 369-375|
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