Notes: Honka (2014) Quantifying Search and Switching Costs in the U.S. Auto Insurance Industry
1/15/2023
1 Summary of the Paper
(ひとことメモ)
1.1 Motivation
- This paper focuses on two types of market frictions, namely, consumer search and switching costs
- Quantifying market frictions is important for the following reasons
- Accounting for consumers’ limited information is necessary to recover true consumer preferences
- Both search and switching costs can increase companies’ market power and lead to higher prices for consumers