Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/108218
Authors: 
Kézdi, Gábor
Csorba, Gergely
Year of Publication: 
2011
Series/Report no.: 
IEHAS Discussion Papers MT-DP - 2011/8
Abstract: 
This paper proposes a simple method for estimating the lock-in effects of switching costs from firm-level data. We compare the behavior of already contracted consumers to the behavior of new consumers as the latter can serve as contrafactual to the former. In panel regressions on firms' incoming and quitting consumers, we look at the differential response to price changes and identify the lock-in effect of switching costs from the difference between the two. We illustrate our method by analyzing the Hungarian personal loan market and find strong lock-in effects.
Subjects: 
switching costs
lock-in
panel data
JEL: 
C33
D12
L13
ISBN: 
978-615-5024-39-9
Document Type: 
Working Paper

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