The existence of switching costs in the use of computer software means that buyers of computer software are __________ likely to change software programs than would be the case in the absence of switching costs, and therefore, the maker of the software program may have __________ reason to innovate.

Question

Quizplus · Accepted Answer

Switching costs make it harder and potentially more expensive for buyers to change software programs, leading to reduced incentives for software makers to innovate since their customers are less likely to switch to competitors.

The Existence of Switching Costs in the Use of Computer