Switching costs and industry policy

King, David. (1994). Switching costs and industry policy Honours Thesis, School of Economics, The University of Queensland.

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Author King, David.
Thesis Title Switching costs and industry policy
School, Centre or Institute School of Economics
Institution The University of Queensland
Publication date 1994
Thesis type Honours Thesis
Total pages 109
Language eng
Subjects 14 Economics
Formatted abstract
Switching costs have been used to explain a variety of economic phenomena from consumer lock in to compatibility issues. One of these phenomenon is that of entry barriers which may arise from switching costs. In particular, the situation where a new domestic firm attempts to enter a domestic market which is currently occupied by a single foreign incumbent.

The purpose of this thesis is to provide industry policy responses to this situation. After examination of the relevant switching cost models and the important issues surrounding industry policy, entry is simulated using a two-period, linear, Cournot-Nash model of switching costs. It is concluded that subsidies represent the most favourable policy tool. Several other alternative policy options are examined, such as government procurement and consumption subsidies, and post-equilibrium policy responses are also suggested.

Final conclusions are then presented with considerations give for dynamic effects and the possibility of retaliation.

Document type: Thesis
Collection: UQ Theses (non-RHD) - UQ staff and students only
Citation counts: Google Scholar Search Google Scholar
Created: Mon, 22 Nov 2010, 11:41:47 EST by Ning Jing on behalf of The University of Queensland Library