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Costly Customer Relations and Pricing
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Titel: |
Costly Customer Relations and Pricing |
In: | Oxford Economic Papers, 59, 2007, 4, S. 641-661 |
veröffentlicht: |
Oxford University Press
|
Umfang: | 641-661 |
ISSN: |
0030-7653 1464-3812 |
Zusammenfassung: | <p>In this paper we show that when a monopolist incurs certain costs for servicing or maintaining its customer-base, price markups may decrease with high demand - i.e. markups are countercylical. Indeed, for a given market share when demand booms each customer on average will purchase more output and the costs of servicing clients are spread across a larger volume of output sold. This increasing-return effect raises the incentive for the monopolists to expand its market-share by reducing markups. We also find evidence on UK data that industries with higher customer-care costs tend to have a higher degree of coutercyclical markups as compared with industries with lower such costs.</p> |
Format: | E-Article |
Quelle: |
sid-55-col-jstorbusiness1archive sid-55-col-jstorbusiness sid-55-col-jstoras2 JSTOR Business I Archive JSTOR Business & Economics JSTOR Arts & Sciences II Archive |
Sprache: | Englisch |