An Examination of Switchover Costs

This thesis project focuses on firm strategies that target consumer switchover costs of three industries: pharmaceuticals, information technology, and food processing. The project explores those that involve increasing customer dependency, predatory marketing, and hidden fees, which improve firms' bottom line at the expense of their competitors, consumers, and the overall economy. Companies will divert resources and time concentrating on ways to undercut competition and force consumers into economic situations that make it exceedingly costly to alternate from one business to another. The aforementioned factors are considered across time and analyzed from an economic standpoint to determine the overall effects on the efficiency of markets. Four case studies of modern companies who employ these methods are presented, along with an analysis of the economic welfare cost created by such practices.