Munich Personal RePEc Archive

Market Frictions: A Unified Model of Search and Switching Costs

Wilson, Chris M (2009): Market Frictions: A Unified Model of Search and Switching Costs.

WarningThere is a more recent version of this item available.

Download (216kB) | Preview


Despite the existence of two vast literatures, very little is known about the potential differences or interactions between search and switching costs. This paper demonstrates the benefits of examining the two frictions in unison. First, the paper shows how subtle distinctions between the two costs can provide important differences in their effects upon consumer behaviour and market prices. In many cases, policymakers may prefer to reduce search costs rather than switching costs. Second, the paper illustrates a simple methodology for estimating the magnitude of both costs while demonstrating the potential bias that can arise from a single-cost approach.

Available Versions of this Item

MPRA is a RePEc service hosted by
the Munich University Library in Germany.