Scandinavian Working Papers in Economics

Working Papers in Economics,
University of Bergen, Department of Economics

No 04/02: Markets with Consumer Switching Costs and Non-Linear Pricing.

Tommy Staahl Gabrielsen () and Steinar Vagstad ()
Additional contact information
Tommy Staahl Gabrielsen: University of Bergen, Department of Economics, Postal: Hermann Fossgt. 6, N-5007 Bergen, Norway
Steinar Vagstad: University of Bergen, Department of Economics, Postal: Hermann Fossgt. 6, N-5007 Bergen, Norway

Abstract: In a non-cooperative oligopoly model where firms use simple linear prices, Klemperer (1987) has shown that the existence of consumers’ switching costs may generate monopoly like prices, and thereby create substantial loss in welfare. We show that when allowing firms to use two-part tariffs, social optimal prices are always set and the size and distribution of switching costs only affect the distribution of surplus between fims and consumers.

Keywords: switching costs; non-linear pricing; duopoly

JEL-codes: D44; D82; L10; L51

7 pages, March 13, 2002

Full text files 

04-02.pdf PDF-file Full text

Download statistics

Questions (including download problems) about the papers in this series should be directed to Kjell Erik Lommerud ()
Report other problems with accessing this service to Sune Karlsson ().

RePEc:hhs:bergec:2002_004This page generated on 2024-10-27 22:37:47.