Price Competition in IT Outsourcing with Switching Costs

DOI

10.2991/ssemse-15.2015.540How to use a DOI?

Keywords

Information Technology Outsourcing; Price Competition; Switching Costs

Abstract

Switching costs play an important role in IT outsourcing price competition. With an infinite repeated game model, the paper examines how participants prices and profits are affected by their costs and switching costs. Incumbents could lock in customers at a price decided by the entrant costs but not its own costs, and earn extra profits summing up to the total switching costs, while entrants use bargain-then-rip-off strategy. Besides customers switching costs, there exist vendors switching costs. Switching costs can be transformed between customers and entrants, and reach equilibrium when the sum is minimum.

Copyright

© 2015, the Authors. Published by Atlantis Press.

Open Access

This is an open access article distributed under the CC BY-NC license (http://creativecommons.org/licenses/by-nc/4.0/).

Download article (PDF)

TY  - CONF
AU  - Y. Zhu
PY  - 2015/11
DA  - 2015/11
TI  - Price Competition in IT Outsourcing with Switching Costs
BT  - Proceedings of the 2015 International Conference on Social Science, Education Management and Sports Education
PB  - Atlantis Press
SP  - 2119
EP  - 2122
SN  - 2352-5398
UR  - https://doi.org/10.2991/ssemse-15.2015.540
DO  - 10.2991/ssemse-15.2015.540
ID  - Zhu2015/11
ER  -