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The medium-term effects of unavailability

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Abstract

This paper develops a new method of identifying why current product unavailability has an effect on future brand choices. If the impact is solely due to changing preferences, then all competitors of the unavailable item gain proportionally to their share; if, however, there is lock-in, then the competitor that is chosen instead of the unavailable product should gain disproportionately more. Denial of service attacks at Yahoo, CNN, and Amazon show that unavailability has a medium-term impact. Lock-in drives 51% of the effect on Yahoo, but it dissipates much more quickly than the effect of changing preferences.

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Authors and Affiliations

  1. Rotman School of Management, University of Toronto, 105 St. George St., Toronto, ON, M5S 3E6, Canada

    Avi Goldfarb

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  1. Avi Goldfarb
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Correspondence to Avi Goldfarb.

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JEL Classification M3 · L8

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Goldfarb, A. The medium-term effects of unavailability. Quant Market Econ 4, 143–171 (2006). https://doi.org/10.1007/s11129-006-8128-8

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  • DOI: https://doi.org/10.1007/s11129-006-8128-8

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