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Profit-Increasing Consumer Exit

delete2013-11-01
delete14
PRE
AI
A
Amit Pazgal *
D
David Soberman
R
Raphael Thomadsen
DOI:10.1287/mksc.2013.0804delete
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摘要

摘要

En 中文
This paper examines the phenomenon of profit-increasing consumer exit and the related phenomenon of profit-decreasing consumer entry We demonstrate that firms can be better off in shrinking markets and worse off in growing markets, even in the absence of competitive entry or exit. Specifically, firms may benefit if a segment of consumers who are relatively indifferent about consuming any product in the category leave the market. Profits can increase for all firms even if the exiting consumers have strong preferences for only one of the products in the market. In shrinking markets, it is reasonable to assume that the people who are likely to exit the market first are people who are least committed to the category. In particular, people who are the least satisfied with the existing offers are the most likely to change their behavior by finding an alternative or adopting a new technology Similarly, in growing markets, consumers who enter the market late are generally the least committed to the category. Such exiting can relax the competitive pressure between firms and lead to increased profitability. Our findings provide an explanation for profit growth that has been observed in product industries exhibiting slow and predictable declines over time, including vacuum tubes, cigarettes, and soft drinks.
Keyword:
competitive analysis
analytic models
game theory
market evolution
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期刊

Journal of the Academy of Marketing Science 封面图
Journal of the Academy of Marketing Science
IF:
10.1
论文数:
3.4K
被引数:
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Rice University
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washington university (wustl)
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university of toronto
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