No, because in those cases, the seller is also unable to adjust the price.
The model might apply, but only very slowly. A single tick of the model would be equal to the duration of a contract (i.e., instead of updating prices multiple times per day, as the authors propose, prices would be updated every 1-2 years).
Only individuals are stuck with 24 month contracts. AT&T and Verizon can change their prices for new contracts / renewals without any problem so they can use daily ticks. Even though they keep their customers long term.
It doesn't matter. They can't change the price on existing contracts, and when those contracts are up, customers have the option of picking a new seller.
By contrast, when sellers react quickest, they are quick to copy others offering poor value for money. This reduces the number of sellers offering good value for money in a vicious cycle that drives prices as high as possible.
There are two conditions, high number of cycles, and company's reacting faster than customers. As I said there is a high number of cycles because company's can change their price for new contracts every day or hour etc. The second condition that customers reactor slower which does not mean they can't renew at the end of their term just that they don't react as fast to changing prices as companies do.
Personally, I have gone though several cycles of renewing my contract and I must say I don't price shop on the day I sign the new contract. Do you?
I guess the point I was trying (badly) to make is that long-term contracts are not the same thing as buyer inflexibility, though they can be a cause of it.
The model might apply, but only very slowly. A single tick of the model would be equal to the duration of a contract (i.e., instead of updating prices multiple times per day, as the authors propose, prices would be updated every 1-2 years).