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Title: Market frictions: a unified model of search costs and switching costs
Authors: Wilson, Chris M.
Keywords: Search costs
Switching costs
Consumer search
Oligopoly
Pricing
Issue Date: 2012
Publisher: © Elsevier
Citation: WILSON, C.M., 2012. Market frictions: a unified model of search costs and switching costs. European Economic Review, 56 (6), pp.1070-1086.
Abstract: It is well known that search costs and switching costs can create market power by constraining the ability of consumers to change suppliers. While previous research has examined each cost in isolation, this paper demonstrates the benefits of examining the two types of friction in unison. The paper shows how subtle distinctions between the two costs can provide important differences in their effects upon consumer behaviour, competition and welfare. In addition, the paper also illustrates a simple empirical methodology for estimating separate measures of both costs, while demonstrating a potential bias that can arise if only one cost is considered.
Description: This paper is also a CCP Working Paper 09-3 and can be found at: http://competitionpolicy.ac.uk/publications/working-papers-2009
This is the author’s version of a work that was accepted for publication in European Economic Review. Changes resulting from the publishing process, such as peer review, editing, corrections, structural formatting, and other quality control mechanisms may not be reflected in this document. Changes may have been made to this work since it was submitted for publication. A definitive version was subsequently published at: http://dx.doi.org/10.1016/j.euroecorev.2012.05.007
Sponsor: This work was supported by the Economic and Social Research Council [grant number PTA-026- 27-1262].
DOI: 10.1016/j.euroecorev.2012.05.007
URI: https://dspace.lboro.ac.uk/2134/15285
Publisher Link: http://dx.doi.org/10.1016/j.euroecorev.2012.05.007
ISSN: 0014-2921
Appears in Collections:Published Articles (Economics)

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