ATM PRICING AND LOCATION GAMES IN THE RETAIL BANKING INDUSTRY

Reynold Byers (), Shuya Yin () and Xiaona Zheng ()
Additional contact information
Reynold Byers: W.P. Carey School of Business, Arizona State University, AZ 85287, USA
Shuya Yin: Paul Merage School of Business, University of California, Irvine, CA 92697, USA
Xiaona Zheng: Guanghua School of Management, Peking University, Beijing 100871, China

Asia-Pacific Journal of Operational Research (APJOR), 2012, vol. 29, issue 01, 1-29

Abstract: This paper studies a competitive Hotelling-style market with two symmetric banks that decide the pricing and location of their automated teller machines (ATMs). Two different systems are considered: An unregulated model wherein banks are allowed to set surcharges, and a regulated model in which surcharges are banned. We derive equilibrium outcomes and compare them in the two systems, and find that banks always maintain a certain distance between ATMs. That distance is larger, indeed maximized, under the regulatory scheme. We also show that, surprisingly, banks always perform better in the regulated model, while consumers may be worse off.

Keywords: Automated teller machine; surcharges; foreign fees; pricing; location (search for similar items in EconPapers)
Date: 2012
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
http://www.worldscientific.com/doi/abs/10.1142/S0217595912400015
Access to full text is restricted to subscribers

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:wsi:apjorx:v:29:y:2012:i:01:n:s0217595912400015

Ordering information: This journal article can be ordered from

DOI: 10.1142/S0217595912400015

Access Statistics for this article

Asia-Pacific Journal of Operational Research (APJOR) is currently edited by Gongyun Zhao

More articles in Asia-Pacific Journal of Operational Research (APJOR) from World Scientific Publishing Co. Pte. Ltd.
Bibliographic data for series maintained by Tai Tone Lim ().