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use of information had not been part of the business case for migrating from cardboard tickets to Oyster cards [2003]

That statement is preposterous. What was the "business case" for building a new payment system, if not optimizing price structure of existing, zone-rated transit? Kewl factor? I think not.

Our examples so far have involved switching costs, like those to Bell Atlantic of replacing switches worth billions of dollars. Do not be misled: even when switching costs appear low, they can be critical for strategy. A million customers, each of whom has switching costs of $100, are just as valuable, collectively, as a single customer whose switching costs are $100 million. The point is that you must compare any switching costs to revenues on a per customer basis and add up these costs across your entire installed base to value that base. These principles apply equally to customers who are businesses or households. [Shapiro and Varian, 1999: 108]


Diversity is the key to economic and political evolution.
by Cat on Wed Mar 17th, 2010 at 09:33:40 AM EST
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