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In consultant–client relationships, relationship longevity can create significant cost advantages and operational efficiencies for both client and consultant. At the same time, each party may also be motivated to look for new perspectives and opportunities by switching to new relationships. However, the benefits of replacing one consulting relationship with another are mitigated by switching costs: the costs associated with the act of changing the relationship itself.

This chapter explores the concept of switching costs by examining various types of costs, the ways these costs have been conceptualized in the literature, and how these costs may impact the nature and continuity of consultant–client relationships. The chapter will end with a series of hypotheses and suggestions for a research agenda to further develop our understanding of this important phenomenon.

This article analyses in what way Swiss academic institutions have had a favourable or unfavourable influence on changing research practices by following developments in four scientific areas – Bose-Einstein Condensates, Evolutionary Developmental Biology, Large-Scale Assessments in education research and Computerised Corpus Linguistics. Based on empirical evidence, we argue that overall a number of institutional conditions have had a positive influence on the decisions of scientists to dare a switch to a new scientific field. One finds, however, also differences in the working of these institutional conditions leading to quicker or slower developments of the four selected scientific areas.

Brand-name pharmaceutical companies have engaged in a variety of business conduct that has increased price. One of these activities involves “product hopping,” or brand switches from one version of a drug to another. The antitrust analysis of product hopping implicates antitrust law, patent law, the Hatch–Waxman Act, and state drug product selection laws, as well as uniquely complicated markets characterized by buyers different from decision makers. As a result, courts have offered inconsistent approaches to product hopping.

In this chapter, we offer a framework that courts and government enforcers can employ to analyze product hopping. The framework is the first to incorporate the characteristics of the pharmaceutical industry. It defines a “product hop” to include instances in which the manufacturer (1) reformulates the product to make the generic nonsubstitutable and (2) encourages doctors to write prescriptions for the reformulated rather than the original product.

When the conduct meets both requirements, our framework offers two stages of analysis. First, we propose two safe harbors to ensure that the vast majority of reformulations will not face antitrust review. Second, the framework examines whether the hop passes the “no-economic-sense” test, determining if the behavior would make economic sense if the hop did not have the effect of impairing generic competition. Showing just how far the courts have veered from justified economic analysis, the test would recommend a different analysis than that used in each of the five product-hopping cases that have been litigated to date, and a different outcome in two of them.

This short case study deals with the analysis of the airborne refueling tanker contract placed by the U.S. Department of Defense to the U.S. group Boeing. The data used in this case is all drawn from secondary sources, and the story told chronologically. Initially, the scene is set with a discussion of the types of relationship, planned and de facto, that emerge when companies do business with each other, and an analysis of the situations when different emphasis is placed upon specific benefits and costs of the relationship. Discussion continues around the concept that relationship benefits are perceived as more important for the continuation of a relationship than relationship costs – when relationship value, direct switching costs, and sunk costs exist, the search for a new partner is reduced.

The question of why Boeing was favored by the U.S Department of Defense over competing Airbus Industries stands in the center of this analysis. The analysis explains how existing business relations and their binding effects, as well as resulting advantages and disadvantages, influence subsequent behavior.

Option models have provided insight into the value of flexibility to switch from one state to another (such as switching a mine or refinery from operating to closed status). More complex flexible processes offer multiple possibilities for switching states. A fabrication facility, for example, may offer options to shift from the current status to any of several alternatives (reflecting reconfiguration of basic facilities to accommodate different operating processes with different outputs). New algorithms enable practical application of complex option pricing models to flexible facilities, improving analysts’ ability to draw sound conclusions about the effects of flexibility and innovativeness on share value. Such models also apply for options with information items as the underlying assets. Information organizations such as oil exploration and development companies may include options to shift from the current capability to any of several alternatives reflecting added abilities to handle new information sources or apply the organization’s talents in new ways. In the case of either physical or information processing, careful attention to estimating the matrix of correlations among the values of potential alternative states allows explicit integration of financial analysis and strategic analysis – especially the influence of substitutes and the anticipated reactions of competitors, suppliers, and potential new entrants.

After pioneering, but insular, work on the conceptualization and measurement of customer value in business markets undertaken in the 80s and 90s, interest in this topic is substantial since the beginning of this decade. Despite this recent interest, marketing scholars concur that value in business markets is still an under-researched subject. This contribution to the debate is threefold. The paper first proposes an own model of customer value conceptualization in business markets; based on several rounds of testing this theoretically grounded model in managerial practice indications exist to conclude that this model may offer benefits over current models.

Secondly, the paper provides a comprehensive survey of pricing approaches in industrial markets. The paper integrates this literature overview with own empirical findings. Concurrently the paper summarizes extant research on the link between pricing approach and profitability in industrial markets. The paper thirdly proposes a framework for value delivery and value-based pricing strategies in industrial markets. Proposing such a framework is both useful as well as necessary. Useful, since this framework guides new product development and pricing decisions and assists in the implementation of price-repositioning strategies for existing products; necessary, since the theoretical and practical adoption of value-based delivery and pricing strategies may have suffered from the lack of a unifying conceptual framework. Two case studies, one involving the pricing decision for a major product launch at a global chemical company, the other involving value delivery at an industrial equipment manufacturer, illustrate the practical applicability of the proposed framework.

The valuation of innovation investments still poses several unresolved questions. Although some authors have analyzed these problems within a framework based on real options theory, their work has not explicitly tested the value of specific real options. The model of firm market value presented in this paper formally includes a technology switching option, which allows a firm to exchange an existing technology with a new technology. We test the model on a panel of publicly traded British firms operating in different manufacturing industries. The results provide support to the claim that the stock market recognizes and evaluates a technology switching option.

With expenditures totaling $227 billion in 2007, prescription drug purchases are a growing portion of the total medical expenditure, and as this industry continues to grow, prescription drugs will continue to be a critical part of the larger health care industry. This chapter presents a survey on the economics of the US pharmaceutical industry, with a focus on the role of R&D and marketing, the determinants (and complications) of prescription drug pricing, and various aspects of consumer behavior specific to this industry, such as prescription drug regulation, the patient's interaction with the physician, and insurance coverage. This chapter also provides background in areas not often considered in the economics literature, such as the role of pharmacy benefit managers in prescription drug prices and the differentiation between alternative measures of prescription drug prices.

This paper focuses on two related questions at the intersection of antitrust and intellectual property law. First, under what circumstances must the holder of a patent or a copyright or the owner of a trade secret allow others to use that intellectual property? Second, under what circumstances can the holder of an intellectual property right use that right to make it difficult for another party to succeed in a related market? These questions have vexed antitrust and intellectual property scholars alike ever since the Federal Circuit ruled in 2000 that patent holders “may enforce the statutory right to exclude others from making, using, or selling the claimed invention free from liability under the antitrust laws,” a ruling that directly contradicted the Ninth Circuit ruling that antitrust liability could be imposed for almost identical conduct, depending on the motivations of the patent holder. The various proceedings in United States v. Microsoft only added fuel to the firestorm of controversy.After briefly retracing the jurisprudential path to see how this situation arose, we propose a solution that primarily involves a variation on the real property concept of adverse possession for the intellectual property space along with a slight extension of the Essential Facilities Doctrine for industries that exhibit network effects. We examine, both for firms with and without market power, how our proposal would resolve the situations presented by large fixed asset purchases, the introduction of entirely new products, and operating systems with network effects. We also demonstrate how our proposal could be applied in the European antitrust enforcement context.