BIROn - Birkbeck Institutional Research Online

    Spatial models of heterogeneous switching costs

    Beckert, Walter and Siciliani, P. (2017) Spatial models of heterogeneous switching costs. Working Paper. Bank of England.

    BoE swp689 (nov 2017).pdf - Author's Accepted Manuscript

    Download (1MB) | Preview


    The presence of sticky, often labelled ‘unengaged’, consumers is arguably one of the most intractable issues faced by competition regulators, in that it entrenches incumbency advantage. We develop a spatial linear model of heterogeneous switching costs that allows for asymmetric distributions of heterogeneous switching costs. We not only model uniform pricing and history-based price discrimination, but also the impact of regulatory intervention aimed at making it easier for customers to be upgraded to a better tariff from their current service provider, something we call ‘leakage’. Finally, we analyse firms’ incentive to adopt history-based price discrimination and voluntarily permit ‘leakage’.


    Item Type: Monograph (Working Paper)
    Additional Information: Staff working Paper No.689. ISSN 1749-9135
    School: School of Business, Economics & Informatics > Economics, Mathematics and Statistics
    Depositing User: Walter Beckert
    Date Deposited: 07 Nov 2017 16:38
    Last Modified: 13 Nov 2017 15:40


    Activity Overview

    Additional statistics are available via IRStats2.

    Archive Staff Only (login required)

    Edit/View Item Edit/View Item