Please use this identifier to cite or link to this item:
http://hdl.handle.net/20.500.11861/5039
Title: | A comparison of different contract forms for consumers with switching costs and changed preferences |
Authors: | Dr. SHEN Na, Nell Su, Jun |
Issue Date: | 2015 |
Source: | Economic Modelling, Nov 2015, vol. 50, pp. 19-26. |
Journal: | Economic Modelling |
Abstract: | This paper compares three contract forms, including short-term contract with price discrimination, short-term contract without price discrimination, and long-term contract with price commitment for consumers with switching costs and changed preferences. We find that long-term contract generates the largest profit for firms. Moreover, we find that switching costs make the market more competitive when consumers have changed preferences, and the higher the switching costs, the more competitive. Our theory combines linear-city duopoly and switching-cost model and the results are consistent with literature, for example price commitment is valuable. Our findings shed light on the practice of different forms of dynamic pricing in various industries including telecommunication industry and airline industry. |
Type: | Peer Reviewed Journal Article |
URI: | http://hdl.handle.net/20.500.11861/5039 |
ISSN: | 0264-9993 |
DOI: | 10.1016/j.econmod.2015.05.014 |
Appears in Collections: | Business Administration - Publication |
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