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An empirical analysis of switching cost in the smartphone market in South Korea

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  • Park, Yuri
  • Koo, Yoonmo

Abstract

Switching cost is an important factor for policy makers to consider because it sets a higher price for locked-in consumers by making the market less competitive. Though there has been some empirical research analyzing switching costs in the mobile telecommunications market, studies considering the characteristics of smartphones, which have their own operating systems and applications, are still rare. In this study, we conduct a hypothetical conjoint survey to analyze switching cost in the smartphone handset market and derive the cost by using the hierarchical Bayesian multinomial logit model to consider respondents׳ heterogeneity. Switching costs of handsets and OS are empirically estimated, and the magnitudes depend on the levels of searching cost, learning cost, and uncertainty when purchasing new smartphones.

Suggested Citation

  • Park, Yuri & Koo, Yoonmo, 2016. "An empirical analysis of switching cost in the smartphone market in South Korea," Telecommunications Policy, Elsevier, vol. 40(4), pages 307-318.
    • Handle: RePEc:eee:telpol:v:40:y:2016:i:4:p:307-318
    DOI: 10.1016/j.telpol.2016.01.004
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    4. Bölen, Mehmet Cem, 2020. "From traditional wristwatch to smartwatch: Understanding the relationship between innovation attributes, switching costs and consumers' switching intention," Technology in Society, Elsevier, vol. 63(C).
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    7. Lim, Chulmin & Kim, Seongcheol, 2022. "Why would the users of Google's cloud services intend to switch to alternative services?," 31st European Regional ITS Conference, Gothenburg 2022: Reining in Digital Platforms? Challenging monopolies, promoting competition and developing regulatory regimes 265653, International Telecommunications Society (ITS).
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