English
 
Help Privacy Policy Disclaimer
  Advanced SearchBrowse
  1. View item / 
  2. Item Summary

Item

ITEM ACTIONSEXPORT
Add to Basket
  Local TagsRelease HistoryDetailsSummary

Released
Paper

Switching Costs in Retroactive Rebates - What's time got to do with it?

MPS-Authors
/persons/resource/persons183167

Maier-Rigaud,  Frank P.
Max Planck Institute for Research on Collective Goods, Max Planck Society;

External Resource

http://www.coll.mpg.de/pdf_dat/2005_03online.pdf
(Preprint)

Fulltext (restricted access)
There are currently no full texts shared for your IP range.
Fulltext (public)
There are no public fulltexts stored in PuRe
Supplementary Material (public)
There is no public supplementary material available
Citation

Maier-Rigaud, F. P. (2005). Switching Costs in Retroactive Rebates - What's time got to do with it?


Cite as: https://hdl.handle.net/11858/00-001M-0000-0028-6F36-D
Abstract
This paper analyzes the role of the reference period in assessing switching costs in retroactive rebates. A retroactive rebate allows a firm to use the inelastic portion of demand as leverage to decrease price in the elastic portion of demand, thereby artificially increasing switching costs of buyers. I identify two factors that determine the extent to which retroactive rebates, as a form of infra-personal price-discrimination, can result in potential market foreclosure. These two factors are the rebate percentage and the threshold at which this percentage is retroactively applied. In contrast to the existing literature, the length of the reference period within which a rebate scheme applies is demonstrated to be at best an indirect approximation of the potential foreclosure effects of a rebate.