This, the existence of Nash equilibria is practically guaranteed according to game theory. And of course switching implies frictional costs, activation energy, and so on in addition to the actual change. If we define “functional, competitive markets” to mean no strange equilibriums then they certainly don’t exist on this planet.
Additionally there are a lot of assumptions that go into proving that markets have Nash equilibria, such as convex utility functions, and perfect information, which is often not true in reality.
