Welfare Effects of Entry Into Markets with Switching Costs

摘要: In many markets, consumers have costs of switching between products that are functionally identical. This note shows entry efficient low-cost competitors into these markets may be socially detrimental. a linear model, reduces social welfare (as conventionally defined) in more than half the relevant parameter space. general there is always range values for which welfare, even if entrant's production lower incumbent's. Copyright 1988 by Blackwell Publishing Ltd.