Understanding Switching Costs in Marketing

Brett Gordon sits down with JP Dube and Günter Hitsch from the University of Chicago Booth School of Business, and Peter Rossi from the UCLA Anderson School of Management. They discuss their influential paper, “Do Switching Costs Make Markets Less Competitive?” Since the 1960s, marketing and economics scholars have studied switching costs, with theoretical literature largely suggesting that these costs lead to higher prices among competing firms. However, when these three researchers conducted an empirical analysis, they found surprising results that challenged the prevailing wisdom. Join them as they share how their project evolved over time, including their measured response to critical feedback and how they expanded their initial scope of inquiry.