Journal of the Korean Operations Research and Management Science Society (한국경영과학회지)

The Korean Operations Research and Management Science Society (한국경영과학회)
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Analysis of Economic Incentive for Price Discount Presupposing Churn-in

전환가입에 따른 가격할인의 경제적 유인 분석

  • 송재도 (동양공업전문대학 경영학부)
  • Published : 2009.06.30
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Abstract

Price discounts presupposing churn-in are important tools of competition in many industries such as mobile telecommunication services and newspaper. In this case, consumers can get discount only through changing the provider. For analyzing this kind of competitions, we should consider the incentive of utilizing iterative switching. Hence, in this paper, we consider multi-stage equilibrium and can find that equilibria are different from one stage discount. In particular, when consumers' decisions are for maximizing multi-stage utility, discounts can bring about churn-out as well as churn-in and firms lose the incentive of discounts.

Keywords

References

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