Testing for Pricing Behavior in the Mortgage Loan Market

Haerang Park

Asian Economic Journal, 2021, vol. 35, issue 3, 270-293

Abstract: This study examines the pricing behavior of banks in the mortgage loan market. Firstly, the paper compares the loan pricing behavior of banks between two periods, one of which is marked as a more competitive state due to regulatory intervention. Secondly, the paper also test for the stock market reaction to model‐implied collusive profits. Using data from banks in Korea, the paper find that mortgage loan rates are more consistent with cooperative pricing behavior than independent pricing behavior in the period from 2006 to 2012.

Date: 2021
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https://doi.org/10.1111/asej.12247

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Persistent link: https://EconPapers.repec.org/RePEc:bla:asiaec:v:35:y:2021:i:3:p:270-293

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