IDEAS home Printed from https://ideas.repec.org/a/ebl/ecbull/eb-07f10001.html
   My bibliography  Save this article

Switching costs and the impact of trade liberalization

Author

Listed:
  • Toru Kikuchi

    (Kobe University)

Abstract

This paper considers a two-period model of market entry with horizontally differentiated products and switching costs. Conditions that are conducive to a competitive environment in the second period are shown to yield a less competitive outcome in the first period. That is, when the marginal cost of a foreign entrant is relatively low, the first-period output of a domestic monopolist is relatively low as well.

Suggested Citation

  • Toru Kikuchi, 2007. "Switching costs and the impact of trade liberalization," Economics Bulletin, AccessEcon, vol. 6(6), pages 1-7.
    • Handle: RePEc:ebl:ecbull:eb-07f10001
    as

    Download full text from publisher

    File URL: http://www.accessecon.com/pubs/EB/2007/Volume6/EB-07F10001A.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Paul Klemperer, 1995. "Competition when Consumers have Switching Costs: An Overview with Applications to Industrial Organization, Macroeconomics, and International Trade," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 62(4), pages 515-539.
    2. James R. MARKUSEN, 2021. "Trade And The Gains From Trade With Imperfect Competition," World Scientific Book Chapters, in: BROADENING TRADE THEORY Incorporating Market Realities into Traditional Models, chapter 14, pages 303-323, World Scientific Publishing Co. Pte. Ltd..
    3. Brander, James A., 1981. "Intra-industry trade in identical commodities," Journal of International Economics, Elsevier, vol. 11(1), pages 1-14, February.
    4. To, Theodore, 1994. "Export subsidies and oligopoly with switching costs," Journal of International Economics, Elsevier, vol. 37(1-2), pages 97-110, August.
    5. Klemperer, Paul D, 1987. "Entry Deterrence in Markets with Consumer Switching Costs," Economic Journal, Royal Economic Society, vol. 97(388a), pages 99-117, Supplemen.
    6. Collie, David & de Meza, David, 2003. "Comparative advantage and the pursuit of strategic trade policy," Economics Letters, Elsevier, vol. 81(2), pages 279-283, November.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Toru Kikuchi, 2009. "Switching Costs And The Foreign Firm'S Entry," Manchester School, University of Manchester, vol. 77(3), pages 366-372, June.
    2. Jorge Fernández‐Ruiz, 2019. "A Mixed Duopoly With Switching Costs," The Japanese Economic Review, Japanese Economic Association, vol. 70(2), pages 235-257, June.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Toru Kikuchi, 2009. "Switching Costs And The Foreign Firm'S Entry," Manchester School, University of Manchester, vol. 77(3), pages 366-372, June.
    2. Lommerud, Kjell Erik & Sorgard, Lars, 2003. "Entry in telecommunication: customer loyalty, price sensitivity and access prices," Information Economics and Policy, Elsevier, vol. 15(1), pages 55-72, March.
    3. Bouckaert, Jan & Degryse, Hans & Provoost, Thomas, 2010. "Enhancing market power by reducing switching costs," Economics Letters, Elsevier, vol. 109(2), pages 131-133, November.
    4. Vatan, Antoine, 2013. "Habit formation and strategic interactions: A new gain from trade?," Economics Letters, Elsevier, vol. 121(1), pages 101-104.
    5. Magnus Lundin & Nils Gottfries & Charlotte Bucht & Tomas Lindström, 2009. "Price and Investment Dynamics: Theory and Plant‐Level Data," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 41(5), pages 907-934, August.
    6. Mark J. Tremblay, 2019. "Platform Competition and Endogenous Switching Costs," Journal of Industry, Competition and Trade, Springer, vol. 19(4), pages 537-559, December.
    7. Mitja Kovač & Ann-Sophie Vandenberghe, 2015. "Regulation of Automatic Renewal Clauses: A Behavioural Law and Economics Approach," Journal of Consumer Policy, Springer, vol. 38(3), pages 287-313, September.
    8. Tsai, Yingyi & Mukherjee, Arijit & Chen, Jong-Rong, 2016. "Host market competition, foreign FDI and domestic welfare," International Review of Economics & Finance, Elsevier, vol. 42(C), pages 13-22.
    9. Stephen Littlechild, 2020. "An Overall Customer Satisfaction score for GB energy suppliers," Working Papers EPRG2027, Energy Policy Research Group, Cambridge Judge Business School, University of Cambridge.
    10. Ioana A. Duca & José M. Montero & Marianna Riggi & Roberta Zizza, 2017. "I will survive. Pricing strategies of financially distressed firms," Temi di discussione (Economic working papers) 1106, Bank of Italy, Economic Research and International Relations Area.
    11. Javier D. Donna, 2021. "Measuring long‐run gasoline price elasticities in urban travel demand," RAND Journal of Economics, RAND Corporation, vol. 52(4), pages 945-994, December.
    12. Jorge Fernández‐Ruiz, 2019. "A Mixed Duopoly With Switching Costs," The Japanese Economic Review, Japanese Economic Association, vol. 70(2), pages 235-257, June.
    13. Wing Man Wynne Lam, 2017. "Switching Costs in Two-Sided Markets," Journal of Industrial Economics, Wiley Blackwell, vol. 65(1), pages 136-182, March.
    14. Donna, Javier D., 2018. "Measuring Long-Run Price Elasticities in Urban Travel Demand," MPRA Paper 92233, University Library of Munich, Germany.
    15. Rizkiah, Siti K. & Disli, Mustafa & Salim, Kinan & Razak, Lutfi A., 2021. "Switching costs and bank competition: Evidence from dual banking economies," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 75(C).
    16. Neary, J Peter & Leahy, Dermot, 2000. "Strategic Trade and Industrial Policy towards Dynamic Oligopolies," Economic Journal, Royal Economic Society, vol. 110(463), pages 484-508, April.
    17. Jitsuzumi, Toshiya, 2015. "Recent Development of Net Neutrality Conditions in Japan: Impact of Fiber Wholesale and Long-term Evolution (LTE)," 26th European Regional ITS Conference, Madrid 2015 127152, International Telecommunications Society (ITS).
    18. Robert C. Feenstra & James A. Markusen & Andrew K. Rose, 1998. "Undertstanding the Home Market Effect and the Gravity Equation: The Role of Differentiating Goods," NBER Working Papers 6804, National Bureau of Economic Research, Inc.
    19. Baomin Dong & Lasheng Yuan, 2010. "The Loss from Trade under International Cournot Oligopoly with Cost Asymmetry," Review of International Economics, Wiley Blackwell, vol. 18(5), pages 818-831, November.
    20. Ciotti, Fabrizio & Hornuf, Lars & Stenzhorn, Eliza, 2021. "Lock-In Effects in Online Labor Markets," LIDAM Discussion Papers CORE 2021014, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).

    More about this item

    Keywords

    cost competitiveness;

    JEL classification:

    • F1 - International Economics - - Trade

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ebl:ecbull:eb-07f10001. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: John P. Conley (email available below). General contact details of provider: .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.