Inertia II: Costly Marketing

Spiegler Ran

in Bounded Rationality and Industrial Organization

Published in print February 2011 | ISBN: 9780195398717
Published online September 2011 | e-ISBN: 9780199896790 | DOI:
Inertia II: Costly Marketing

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This chapter continues the analysis of market competition in the presence of consumer inertia, focusing on the role of costly marketing in overcoming default bias. In particular, the chapter explores firms’ strategic use of attention grabbers and their equilibrium role in consumer switching.

Keywords: inertia; default bias; competition; marketing; attention grabbers; consumer switching; irrelevant alternatives

Chapter.  7619 words. 

Subjects: Economics

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