High Cash Burn in a Price Conscious Economy with Low Switching Costs

Abstract

Through this paper, we have discussed the present Indian start-up ecosystem. Start-up these days are burning cash on a huge scale to attract and retain customers. While they do so to maximize their profit and attain monopoly in the market, they tend to burden themselves with negative cash flow. Our intention is to prove that such companies cannot achieve the desirable market share through price wars. We have used Cournot's principle and a primary survey to explain our point.