Ownership matters. It affects residual rights under incomplete contracts and, therefore, incentives. The first chapter of this thesis analyzes in how far ownership can be substituted by other economic factors. Contrary to an assumption found in the literature market foreclosure can be achieved without vertical integration in the following scenarios: repeated games, reputation games, and also in a finitely repeated game when there are switching costs. The main chapter is concerned with implications of ownership in regulated industries where a monopolistic supplier of an essential input is required by a regulator to charge cost based prices. Our analysis focuses on the impact of ownership on the monopolist's incentives to exploit informational asymmetries about production costs. We conduct a comparative study of vertical integration, vertical separation, and joint ownership. Effects on welfare, investments incentives, and entry are analyzed for each ownership structure. Joint ownership performs best. Accounting separation is shown to be generally ineffective as regulatory instrument. We use an alternative model which allows to take into account network duplication. Starting from a free market analysis of equilibrium pricing and entry decisions we explore the relation between ownership and the degree of regulation required in order to ensure efficient outcomes. Two part tariffs, network duplication, price discrimination and a long-term commitment to fixed input prices induce reductions of final prices. The final part of this thesis investigates results in the theory of competitive market equilibrium. Many of these results rely on restrictive assumptions on consumer behaviour. We analyze in how far traditional equilibrium theory is robust against a relaxation of underlying assumptions. We do not assume agents to be rational in the sense that their choices arise from maximisation. Randomly fluctuating demand is allowed for and consequences for predictions made by traditional competitive equilibrium theory are re-examined.

No description available.

U.S.-based Institutions of Higher Education (IHE) face significant competitive forces including market-based pressures in the form of new and increased competition, an escalating cost base and reduced financial aid sources. The practice of customer loyalty development and the study of the loyalty phenomena are prevalent in the marketing literature. Despite the prevalence of studies focusing on relationship marketing concepts and loyalty as drivers of customer retention, little progress has been made in conceptualizing and testing frameworks that can explain the impact of relationship marketing on attitudinal and behavioral loyalty in an IHE setting. This study proposed a relationship marketing approach towards the challenge of increasing student loyalty and thus ultimately student retention. Both offensive (relationship marketing concepts aimed at increasing trust, commitment and perceived value) and defensive (subjective norms and switching costs) strategies were proposed as antecedents of student loyalty. Several existing marketing and organizational behavior scales were modified for use in an IHE environment. Research into the dynamics of relationship marketing in a real-world setting was conducted to (1) confirm the scales for use in the IHE environment , (2) to broaden the settings in which the selected scales have been deployed, and (3) to offer depth to the relationship marketing and loyalty field of study. A survey was administered in three South Florida IHEs and 549 responses were collected. The use of structural equation modeling permitted the researcher to establish the measurement validity of the relationship marketing survey instrument and the statistical reliability and validity of the of the proposed variables. There were significant relationships noted between: trust and perceived value; perceived value and commitment; commitment and loyalty; front line employee behaviors and trust; and management policies and procedures and trust; confirming past studies. However, counter to past research, results showed no significant relationship between subjective norms and commitment. Some of the limitations from previous research were addressed by proposing a more integrated model that combined both offensive and defensive marketing constructs. Future research is needed to determine the causes for the lack of statistical significance for the proposed defensive marketing strategies.

Medicare eligibles have the option of choosing from a menu of privately administered managed care plans, known as Medicare Advantage (MA) plans, in lieu of conventional fee-for-service Medicare coverage ("original Medicare"). These plans often provide extra benefits to enrollees, but may impose large switching costs as a result of restrictive provider networks, differences in coverage across plans, and learning and search costs. I propose a structural dynamic discrete choice model of how consumers who are persistently heterogeneous make the choice among MA plans and original Medicare based on the characteristics of the available MA plans. The model explicitly incorporates a switching cost and changes over time in choice sets and plan characteristics. I estimate the parameters of the model, including the switching cost, using the methods developed by Gowrisankaran and Rysman (2011). The estimates indicate that the switching cost is statistically and economically significant. Through a series of counterfactual analyses, I find that the share of consumers choosing MA plans in place of original Medicare would more than triple in the absence of switching costs, and nearly double if plan exit and quality changes were eliminated. I also find that when switching costs are accounted for the Medicare Advantage program only minimally increases consumer welfare.

<p><strong>Abstract</strong><strong></strong></p><p>With the Introduction of the internet and human technological advancement, our everyday lives have changed dramatically over the past 20 years and because of this, how we communicate, form social networks and purchase or sell goods have also developed.</p><p>In the light of this, we have completed this thesis which concerns the influence of the internet and the possibilities of forming long lasting relationships between businesses and customers through what we have described as ‘Locking in’ the customer. This is done by forming ‘Psychological Switching Costs’ that make the cognitive process of switching too expensive or un-wanted by the customer. In order to develop an understanding of this we saw it as prudent to interview senior managers of businesses that operate mainly on the internet to discover if they attempt such strategic moves in, ‘Locking in’ customers. Thus forming the research question; How are Companies based on the internet using Psychological Switching Costs as a strategy to Lock in the customers?</p><p>The process by which the information was collected was through a qualitative method and semi-structured interviews. We found from the respondents that were interviewed that when it comes to operating a business on the internet it is important to consider, Transparency, Two-way communication, Simplicity, Agility and Flexibility in creating a loyal customer who is positively locked in. These were the strategies considered by the respondents to have an effect on customers.</p><p>One of the most interesting points that were made was that if the customer was locked in to the business, the business did not have to be as dynamic. Thus, according to the respondents, Psychological Switching Costs do have an influence on how they form strategy to Lock In customers. In that it can be beneficial to attempt to Lock in customers rather than develop other Dynamic Capabilities. This factor seems very relevant when considering communication, agility and flexibility, in that by forming relationships and strategies directly to the customer these companies are creating something that is difficult to substitute, un-imitable for their competitors and convenient to the customer.</p>

<p>The purpose of this thesis is to map out and investigate how the banking sector affects a customer’s willingness to change bank, and what the switching costs are for a customer when making these changes. A case study was performed through qualitative and quantitative questionnaires and interviews. The qualitative part was carried out to create hypotheses. The hypotheses was tested in a quantitative survey to be able to either accepted or rejected these them. When merging the hypotheses with the performed survey the authors came to the conclusion that there are two major switching costs that affect a customer’s willingness to change bank. These two are financial and non-financial costs, the financial cost can appear as good economical conditions provided by the bank and the non-financial cost through the relation between the bank and a customer. Further, the authors have created a tool to be used by a bank in order to achieve a high amount of quality and also in what dimension they have to interact with their customers’ needs in order to keep them loyal and satisfied.</p> / <p>Syftet med denna uppsats var att kartlägga vilka inträdes- och utträdesbarriärer som påverkar kundernas rörlighet på den privata bankmarknaden samt beskriva hur ban-ker kan agera för att erhålla och bibehålla nya kunder.Problemfrågan som lyder: ”Hur kan en bank öka tillflödet och bibehålla bankkunder genom att använda sig av inträdes- och utträdesbarriärer på den privata bankmark-naden?” framkom delvis genom diskussion med fallföretagets VD och delvis utifrån vetenskapliga artiklar. Både genom banker och också konsumentbankbyrån skall det vara relativt enkelt för kunderna att byta bank, dock tenderar bankkunderna till att stanna kvar på sin befintliga bank även då de skulle kunna erhålla bättre villkor och avgifter genom ett byte. Med anledning av detta så framkom det att det existerar bar-riärer på bankmarknaden som hindrar bankbyte för kunderna, med det som bank-grund ansåg vi det intressant att analysera om banken kan påverka dessa för egen vinnig.I teoridelen beskriver vi fyra olika teorier vilka vi använder som verktyg för att be-svara vår problemfråga. Den första teorin innefattar kundens beslutsprocess för att identifiera vilka steg kunden går igenom när beslut skall tas. Genom att göra detta kan vi se att många kunder redan har gått igenom flera av stegen i processen och de väntar på rätt tillfälle. Den andra teorin behandlar kundens bedömning av kvalitet och enligt teorin finns det tre olika dimensionen av kvalitet, dessa är teknisk, funktionell och image. Dessa tre dimensioner använder vi i en modell som vi skapat som slut-sats, modellen skall fungera som ett verktyg för banker för att uppnå nöjda kunder. Den tredje teorin behandlar kundlojalitet, denna teori hänvisar tillbaka till den förra då den illustrerar hur viktigt det är att kundens upplevda kvalitet stämmer överens med den förväntade kvalitén. Den fjärde teorin belyser inträdes- och utträdesbarriä-rer och även utifrån perspektiven finansiell och icke finansiell. Genom att dela in dem efter de perspektiven har det varit möjligt att ta fram två stora barriärer, en från varje perspektiv.Genom tre kvalitativa intervjuer med personer på olika positioner inom det valda fallföretaget samt en enkätundersökning riktad mot bankkunder har den empiriska delen skapats. Den information som intervjuerna genererat har vi använt oss av för att utveckla de hypoteser som illustreras i avsnittet 4.5. Dessa hypoteser prövade vi genom en enkätundersökning riktad mot 80 bankkunder.Vi kom fram till att om en bank vill öka tillflödet av bankkunder bör banken identifi-era de största inträdes- och utträdesbarriärerna. De två största barriärerna som vi identifierat är en finansiell barriär (bra villkor) och den andra var en icke finansiell barriär (relationen till banken). Dessa två stora barriärer är de som påverkar de got-ländska bankkunderna till störst del på marknaden i valet av bank. Ett annat intres-sant resultat var att lojalitet är ett diffust begrepp på bankmarknaden varken banken eller bankkunden kan definiera begreppet samtidigt visar resultatet från enkätunder-sökningen att majoriteten anser sig lojala mot sin bank men att de inte tjänar något på att vara lojal.</p>

Abstract With the Introduction of the internet and human technological advancement, our everyday lives have changed dramatically over the past 20 years and because of this, how we communicate, form social networks and purchase or sell goods have also developed. In the light of this, we have completed this thesis which concerns the influence of the internet and the possibilities of forming long lasting relationships between businesses and customers through what we have described as ‘Locking in’ the customer. This is done by forming ‘Psychological Switching Costs’ that make the cognitive process of switching too expensive or un-wanted by the customer. In order to develop an understanding of this we saw it as prudent to interview senior managers of businesses that operate mainly on the internet to discover if they attempt such strategic moves in, ‘Locking in’ customers. Thus forming the research question; How are Companies based on the internet using Psychological Switching Costs as a strategy to Lock in the customers? The process by which the information was collected was through a qualitative method and semi-structured interviews. We found from the respondents that were interviewed that when it comes to operating a business on the internet it is important to consider, Transparency, Two-way communication, Simplicity, Agility and Flexibility in creating a loyal customer who is positively locked in. These were the strategies considered by the respondents to have an effect on customers. One of the most interesting points that were made was that if the customer was locked in to the business, the business did not have to be as dynamic. Thus, according to the respondents, Psychological Switching Costs do have an influence on how they form strategy to Lock In customers. In that it can be beneficial to attempt to Lock in customers rather than develop other Dynamic Capabilities. This factor seems very relevant when considering communication, agility and flexibility, in that by forming relationships and strategies directly to the customer these companies are creating something that is difficult to substitute, un-imitable for their competitors and convenient to the customer.

Esta tesis consiste en tres artículos de investigación independientes que analizan diferentes estrategias implementadas en los mercados con competencia imperfecta.El primer articulo presenta un modelo formal que explica algunas de las razones que determinan las empresas producir segundas marcas - productos de perfil relativamente bajo lanzados por las empresas de renombre que deciden introducir diferenciación vertical. El modelo que presentamos incluye dos versiones. En la primera, la competencia en el espacio horizontal tiene lugar entre rivales que producen bienes de calidad alta similar, con diferentes bases de consumidores potenciales. En este caso, la producción de segundas marcas por las empresas intermedias puede surgir como un equilibrio en un juego no-cooperativo. Este resultado está en concordancia con las observaciones empíricas sobre los productores de tamaño medio que producen marcas blancas para atacar al líder del mercado. En la segunda versión del modelo, la competencia horizontal viene de un rival de calidad baja. Aquí, incluso los lideres del mercado pueden producir segundas marcas para protegerse de la competencia en el segmento bajo del mercado. Esto es similar con el propósito de los "fighting brands" comentados en la literatura de management. Finalmente, incluimos un análisis de bienestar para los dos casos.El segundo articulo trata sobre si la entrada es socialmente deseable. Obtenemos resultados opuestos a los obtenidos en los estudios anteriores que apuntan a una tendencia de entrada excesiva. El supuesto crucial que lleva a estos resultados previos es la simetría entre las empresas que ya existen en el mercado y los entrantes potenciales. Nuestro papel, apoyado por las observaciones empíricas en los nuevos mercados privatizados de Europa del Este, permite a los nuevos entrantes que sean mas competitivos. En este caso, tanto para la competencia en cantidad como para la de precios, la entrada puede ser insuficiente desde el punto de vista social. Este papel propone también una herramienta original para regular la entrada.Finalmente, el objetivo del tercer capitulo de la tesis es estudiar los efectos de los costes de sustitución endógenos sobre la eficiencia económica y el bienestar de los consumidores en nuevos contextos económicos a los estudiados hasta ahora por la literatura. El principal resultado de este articulo es que los programas que premian la lealtad de los consumidores (las empresas que endogenizan los costes de sustitución) aumentan la competencia. Nosotros utilizamos un modelo de competencia monopolistica, que elimina el efecto estratégico encontrado en modelos previos de duopolio. El papel también demuestra que la forma de compromiso es irrelevante: una función lineal de descuentos es equivalente al compromiso en precios futuros. Finalmente demostramos que la presencia de costes de sustitución exógenos reduce los incentivos de las empresas de introducir costes de sustitución endógenos. / This thesis consists of three independent pieces of research analysing different strategies implemented in imperfectly competitive markets.The first article of the thesis presents a formal model that explains some of the reasons that lie behind firms' decisions to produce secondary brands. These are lower profile products that well-known brand names launch when decide to introduce vertical differentiation. Two versions of a theoretical model are provided. In the first one, competition in the horizontal space takes place between similar high-quality rivals with different potential customer bases. In this case, production of secondary brands by intermediate firms may emerge as the equilibrium of a non-cooperative game. This is in line with the empirical observations regarding medium size manufacturers that produce private labels in order to attack the brand leader. In the second version of the model, horizontal competition comes from a low-quality rival. Here, even market leaders may produce secondary brands to protect themselves from competition in the low-end of the market. This is similar to the scope of fighting brands discussed in the management literature. Finally, some welfare analysis is provided for the two cases.The second article deals with the social desirability of entry. Previous results in the literature, pointing to a tendency for excessive entry, are reversed. The crucial assumption leading to these results is the symmetry between incumbents and potential entrants. This paper, supported by empirical observations from the newly privatised markets in Eastern Europe, allows for more competitive entrants. In this case, both for quantity and price competition, entry may be insufficient. The paper also proposes an innovative intervention tool to regulate entry.Finally, the third chapter of the thesis analyses the effects of loyalty rewarding pricing schemes on market performance. Unlike previous results in the literature and against the believes of some policy analysts, the main finding of this paper is that these programs enhance competition. Strategic commitment effect, present in duopoly analysis, was crucial in determining the results of previous articles dealing with this issue. This effect is eliminated here by using a monopolistically competitive framework, which leads to a more realistic approach. The paper also shows that, the form of commitment is irrelevant, as a linear discounting rule is equivalent to committing to future prices. Finally, it is proved that the presence of exogenous switching costs reduces firm's incentives to introduce endogenous switching costs.

The purpose of this thesis is to map out and investigate how the banking sector affects a customer’s willingness to change bank, and what the switching costs are for a customer when making these changes. A case study was performed through qualitative and quantitative questionnaires and interviews. The qualitative part was carried out to create hypotheses. The hypotheses was tested in a quantitative survey to be able to either accepted or rejected these them. When merging the hypotheses with the performed survey the authors came to the conclusion that there are two major switching costs that affect a customer’s willingness to change bank. These two are financial and non-financial costs, the financial cost can appear as good economical conditions provided by the bank and the non-financial cost through the relation between the bank and a customer. Further, the authors have created a tool to be used by a bank in order to achieve a high amount of quality and also in what dimension they have to interact with their customers’ needs in order to keep them loyal and satisfied. / Syftet med denna uppsats var att kartlägga vilka inträdes- och utträdesbarriärer som påverkar kundernas rörlighet på den privata bankmarknaden samt beskriva hur ban-ker kan agera för att erhålla och bibehålla nya kunder.Problemfrågan som lyder: ”Hur kan en bank öka tillflödet och bibehålla bankkunder genom att använda sig av inträdes- och utträdesbarriärer på den privata bankmark-naden?” framkom delvis genom diskussion med fallföretagets VD och delvis utifrån vetenskapliga artiklar. Både genom banker och också konsumentbankbyrån skall det vara relativt enkelt för kunderna att byta bank, dock tenderar bankkunderna till att stanna kvar på sin befintliga bank även då de skulle kunna erhålla bättre villkor och avgifter genom ett byte. Med anledning av detta så framkom det att det existerar bar-riärer på bankmarknaden som hindrar bankbyte för kunderna, med det som bank-grund ansåg vi det intressant att analysera om banken kan påverka dessa för egen vinnig.I teoridelen beskriver vi fyra olika teorier vilka vi använder som verktyg för att be-svara vår problemfråga. Den första teorin innefattar kundens beslutsprocess för att identifiera vilka steg kunden går igenom när beslut skall tas. Genom att göra detta kan vi se att många kunder redan har gått igenom flera av stegen i processen och de väntar på rätt tillfälle. Den andra teorin behandlar kundens bedömning av kvalitet och enligt teorin finns det tre olika dimensionen av kvalitet, dessa är teknisk, funktionell och image. Dessa tre dimensioner använder vi i en modell som vi skapat som slut-sats, modellen skall fungera som ett verktyg för banker för att uppnå nöjda kunder. Den tredje teorin behandlar kundlojalitet, denna teori hänvisar tillbaka till den förra då den illustrerar hur viktigt det är att kundens upplevda kvalitet stämmer överens med den förväntade kvalitén. Den fjärde teorin belyser inträdes- och utträdesbarriä-rer och även utifrån perspektiven finansiell och icke finansiell. Genom att dela in dem efter de perspektiven har det varit möjligt att ta fram två stora barriärer, en från varje perspektiv.Genom tre kvalitativa intervjuer med personer på olika positioner inom det valda fallföretaget samt en enkätundersökning riktad mot bankkunder har den empiriska delen skapats. Den information som intervjuerna genererat har vi använt oss av för att utveckla de hypoteser som illustreras i avsnittet 4.5. Dessa hypoteser prövade vi genom en enkätundersökning riktad mot 80 bankkunder.Vi kom fram till att om en bank vill öka tillflödet av bankkunder bör banken identifi-era de största inträdes- och utträdesbarriärerna. De två största barriärerna som vi identifierat är en finansiell barriär (bra villkor) och den andra var en icke finansiell barriär (relationen till banken). Dessa två stora barriärer är de som påverkar de got-ländska bankkunderna till störst del på marknaden i valet av bank. Ett annat intres-sant resultat var att lojalitet är ett diffust begrepp på bankmarknaden varken banken eller bankkunden kan definiera begreppet samtidigt visar resultatet från enkätunder-sökningen att majoriteten anser sig lojala mot sin bank men att de inte tjänar något på att vara lojal.

<p>This dissertation extends the empirical industrial organization literature with two essays on strategic decisions of firms in imperfectly competitive markets and one essay on how inertia in consumer choice can result in significant welfare losses. Using data from the airline industry I study a well-known puzzle in the literature whereby incumbent firms decrease fares when Southwest Airlines emerges as a potential entrant, but is not (yet) competing directly. In the first essay I describe this so-called Southwest Effect and use reduced-form analysis to offer possible explanations for why firms may choose to forgo profits today rather than wait until Southwest operates the route. The analysis suggests that incumbent firms are attempting to signal to Southwest that entry is unprofitable so as to deter its entry. The second essay develops this theme by extending a classic model from the IO literature, limit pricing, to a dynamic setting. Calibrations indicate the price cuts observed in the data can be captured by a dynamic limit pricing model. The third essay looks at another concentrated industry, mobile telecoms, and studies how inertia in choice (be it inattention or switching costs) can lead to consumers being on poorly matched cellphone plans and how a simple policy proposal can have a considerable effect on welfare.</p> / Dissertation