Competition and Dynamic Pricing in Markets with Consumer Switching Costs

Research output: Contribution to conferencePaperResearchpeer-review

Abstract

In markets with switching costs, firms increase their price as their market share grows. I study the effect of entry on these price dynamics in the Dutch mortgage market. Since en- try occurred in a subset of markets, I control for market-level shocks with a differences-in- differences strategy. Moreover, I exploit the multi-product nature of incumbents to control for unobserved firm-level differences. Consistent with a simple theoretical framework, banks with more locked-in customers decrease their interest rates less after entry. This can explain why policies that encourage competition often disappoint in markets with switching costs. I also discuss implications for competition policy.
Original languageEnglish
Publication date2019
Number of pages36
Publication statusPublished - 2019
Event 46th Annual Conference of the European Association for Research in Industrial Economics. EARIE 2019 - Ciutadella of the Universitat Pompeu Fabra, Barcelona, Spain
Duration: 30 Aug 20191 Sep 2019
Conference number: 46
https://www.barcelonagse.eu/earie2019

Conference

Conference 46th Annual Conference of the European Association for Research in Industrial Economics. EARIE 2019
Number46
LocationCiutadella of the Universitat Pompeu Fabra
CountrySpain
CityBarcelona
Period30/08/201901/09/2019
Internet address

Cite this

Thiel, J. H. (2019). Competition and Dynamic Pricing in Markets with Consumer Switching Costs. Paper presented at 46th Annual Conference of the European Association for Research in Industrial Economics. EARIE 2019, Barcelona, Spain.
Thiel, Jurre H. / Competition and Dynamic Pricing in Markets with Consumer Switching Costs. Paper presented at 46th Annual Conference of the European Association for Research in Industrial Economics. EARIE 2019, Barcelona, Spain.36 p.
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Thiel, JH 2019, 'Competition and Dynamic Pricing in Markets with Consumer Switching Costs' Paper presented at, Barcelona, Spain, 30/08/2019 - 01/09/2019, .

Competition and Dynamic Pricing in Markets with Consumer Switching Costs. / Thiel, Jurre H.

2019. Paper presented at 46th Annual Conference of the European Association for Research in Industrial Economics. EARIE 2019, Barcelona, Spain.

Research output: Contribution to conferencePaperResearchpeer-review

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Thiel JH. Competition and Dynamic Pricing in Markets with Consumer Switching Costs. 2019. Paper presented at 46th Annual Conference of the European Association for Research in Industrial Economics. EARIE 2019, Barcelona, Spain.