Strategic short-termism: Implications for the management and acquisition of customer relationships

Topi Miettinen; Rune Stenbacka

doi:10.1016/j.jebo.2018.07.006

Strategic short-termism: Implications for the management and acquisition of customer relationships

Topi Miettinen, Rune Stenbacka

Nationalekonomi, Helsingfors

Forskningsoutput: Tidskriftsbidrag › Artikel › Vetenskaplig › Peer review

4 Citeringar (Scopus)

Sammanfattning

We study a duopoly model of history-based price competition with switching costs and demonstrate how strategic history-based pricing induces the owners of the firms to implement managerial short-termism by delegating the pricing decisions to managers with a discount factor lower than that of the owners. Managerial short-termism is a strategic device whereby owners can soften price competition at the stage when customer relationships are established. The degree of short short-termism is shown to depend on the market structure, the intensity of competition and the magnitude of switching costs.

Originalspråk	Engelska
Referentgranskad vetenskaplig tidskrift	Journal of Economic Behavior & Organization
Volym	153
Nummer	September
Sidor (från-till)	200-222
Antal sidor	23
ISSN	0167-2681
DOI	https://doi.org/10.1016/j.jebo.2018.07.006
Status	Publicerad - 04.08.2018
MoE-publikationstyp	A1 Originalartikel i en vetenskaplig tidskrift

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512 Företagsekonomi

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10.1016/j.jebo.2018.07.006Licens: CC BY-NC-ND

1-s2.0-S0167268118301835-mainPublicerad version, 875 KBLicens: CC BY-NC-ND

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abstract = "We study a duopoly model of history-based price competition with switching costs and demonstrate how strategic history-based pricing induces the owners of the firms to implement managerial short-termism by delegating the pricing decisions to managers with a discount factor lower than that of the owners. Managerial short-termism is a strategic device whereby owners can soften price competition at the stage when customer relationships are established. The degree of short short-termism is shown to depend on the market structure, the intensity of competition and the magnitude of switching costs.",

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Strategic short-termism: Implications for the management and acquisition of customer relationships

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