Managing switching costs in multiperiod procurements with strategic buyers

Published

Journal Article

This article examines the use of switching costs by long-lived strategic buyers to manage dynamic competition between rival suppliers. The analysis reveals how buyers may employ switching costs to their advantage. We show that when switching costs are high, a buyer may induce suppliers to price more competitively by credibly threatening to replace the incumbent supplier with his rivals. The implications of this finding for adoption of technology and firm organization are explored in settings in which the buyer is integrated with the suppliers and where the buyer is an outsourcer.

Full Text

Duke Authors

Cited Authors

  • Lewis, TR; Yildirim, H

Published Date

  • November 1, 2005

Published In

Volume / Issue

  • 46 / 4

Start / End Page

  • 1233 - 1269

Electronic International Standard Serial Number (EISSN)

  • 1468-2354

International Standard Serial Number (ISSN)

  • 0020-6598

Digital Object Identifier (DOI)

  • 10.1111/j.1468-2354.2005.00366.x

Citation Source

  • Scopus