This paper contains theoretical and empirical analysis of competition to retain customers. A formal game-theoretic model suggests that large firms are likely to exhibit greater customer retention rates than their smaller rivals in equilibrium even when their (common) customer retention technology does not exhibit increasing returns to scale. This hypothesis is corroborated by an empirical analysis of competition in ordinary life insurance.

Keywords:

• Marketing
• Insurance; Insurance Companies
• Marketing and Advertising
• Industry Studies--Services--Insurance