Competition for Migrating Customers: A Game-Theoretic Analysis in a Regulated Regime

Migration processes of customers between alternative providers are becoming more and more relevant. Providers competing for migrating customers may adopt a delaying strategy to retain customers who are willing to leave, facing regulatory sanctions for that unfair behaviour. The contribution of this paper is to propose a game-theoretic model to describe the resulting competition among providers. For that model, both stable and unstable Nash equilibria are shown to exist and the providers´ equilibrium strategies can be derived, in general numerically. In the stable equilibrium case the delaying strategy predicted by the model introduces a mean delay that is a strongly nonlinear (decaying) function of the sanction value.