Supplier surfing: Competition and consumer behavior in subscription markets
Publication
, Journal Article
Taylor, CR
Published in: RAND Journal of Economics
January 1, 2003
I explore the practice of offering subscribers enticements to switch suppliers. This type of competition is natural in subscription markets for homogeneous goods and services. Efficiency is impaired because subscribers are induced to expend resources changing suppliers. Subscription markets are fully competitive only when three or more firms serve the industry. In this case, the price offered to switchers is below cost, while nonswitchers pay a premium. Each firm earns rent on its customer base, but zero expected profit on each new subscriber it attracts. When firms can track switching behavior, consumers may change suppliers in order to establish reputations.
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Published In
RAND Journal of Economics
DOI
ISSN
0741-6261
Publication Date
January 1, 2003
Volume
34
Issue
2
Start / End Page
223 / 246
Related Subject Headings
- Economics
- 3803 Economic theory
- 3802 Econometrics
- 3801 Applied economics
- 14 Economics
Citation
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ICMJE
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Taylor, C. R. (2003). Supplier surfing: Competition and consumer behavior in subscription markets. RAND Journal of Economics, 34(2), 223–246. https://doi.org/10.2307/1593715
Taylor, C. R. “Supplier surfing: Competition and consumer behavior in subscription markets.” RAND Journal of Economics 34, no. 2 (January 1, 2003): 223–46. https://doi.org/10.2307/1593715.
Taylor CR. Supplier surfing: Competition and consumer behavior in subscription markets. RAND Journal of Economics. 2003 Jan 1;34(2):223–46.
Taylor, C. R. “Supplier surfing: Competition and consumer behavior in subscription markets.” RAND Journal of Economics, vol. 34, no. 2, Jan. 2003, pp. 223–46. Scopus, doi:10.2307/1593715.
Taylor CR. Supplier surfing: Competition and consumer behavior in subscription markets. RAND Journal of Economics. 2003 Jan 1;34(2):223–246.
Published In
RAND Journal of Economics
DOI
ISSN
0741-6261
Publication Date
January 1, 2003
Volume
34
Issue
2
Start / End Page
223 / 246
Related Subject Headings
- Economics
- 3803 Economic theory
- 3802 Econometrics
- 3801 Applied economics
- 14 Economics