Entry Deterrence in Markets with Consumer Switching Costs.
In many markets consumers have transaction or learning "switching costs" between functionally undifferentiated brands. New entry into such markets may be deterred either by large customer bases and/or large switching costs, which deny customers to an entrant, or by small customer bases and/or small switching costs, which mean an incumbent will respond aggressively to an entrant. An incumbent threatened by entry may therefore price either lower or higher than otherwise. A firm with the right t...Expand abstract
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