Asymmetries in banking conduct: A Cournot - Bertrand model
Eleni Dalla
Economics Letters, 2023, vol. 233, issue C
Abstract:
This paper presents a Cournot – Bertrand model with differentiated loans and deposits. In this context, banks compete in different strategic variables, with bank 1 competing in quantities and bank 2 in interest rates. It is shown that loan and deposit differentiation are necessary conditions for a unique Nash equilibrium. The analysis constitutes a simple framework for the introduction of asymmetries in the behavior of oligopolistic banks, providing possible policy and bank ownership extensions.
Keywords: Cournot-Bertrand model; Loan differentiation; Deposit differentiation (search for similar items in EconPapers)
JEL-codes: G21 L13 (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:233:y:2023:i:c:s0165176523004524
DOI: 10.1016/j.econlet.2023.111426
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