IDEAS home Printed from https://ideas.repec.org/a/ebl/ecbull/eb-08l10036.html
   My bibliography  Save this article

Strategic choice of price policy under exogenous switching costs

Author

Listed:
  • Yuncheol Jeong

    (Faculty of Business and Commerce, Keio University)

  • Masayoshi Maruyama

    (Graduate School of Business Administration, Kobe University)

Abstract

This paper examines the equilibrium incentive for firms to use behavior-based price discrimination in a duopoly market with exogenous switching costs. We find that if there is a large difference in the existing market shares between two firms, then discriminatory pricing is a unique Nash equilibrium. Otherwise, there are three Nash equilibria: both firms engage in discriminatory pricing, or engage in uniform pricing, or engage in mixed strategies. The respective firms are worse off in the discriminatory equilibrium compared with the others.

Suggested Citation

  • Yuncheol Jeong & Masayoshi Maruyama, 2008. "Strategic choice of price policy under exogenous switching costs," Economics Bulletin, AccessEcon, vol. 12(26), pages 1-8.
    • Handle: RePEc:ebl:ecbull:eb-08l10036
    as

    Download full text from publisher

    File URL: http://www.accessecon.com/pubs/EB/2008/Volume12/EB-08L10036A.pdf
    Download Restriction: no
    ---><---

    Citations

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


    Cited by:

    1. Yuncheol Jeong & Masayoshi Maruyama, 2009. "Commitment to a strategy of uniform pricing in a two-period duopoly with switching costs," Journal of Economics, Springer, vol. 98(1), pages 45-66, September.

    More about this item

    Keywords

    Behavior-based price discrimination;

    JEL classification:

    • L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance
    • D4 - Microeconomics - - Market Structure, Pricing, and Design

    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-08l10036. 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.

    We have no bibliographic references for this item. You can help adding them by using 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.