Bank behavior and the interbank rate in an oligopolistic market

Linda A. Toolsema and Lambert Schoonbeek

No 99E49, Research Report from University of Groningen, Research Institute SOM (Systems, Organisations and Management)

Abstract: The well-known Klein-Monti model of bank behavior considers a monopolistic bank. We demonstrate that this model’s results on the comparative static effects of a change in the exogenous interbank market interest rate do not necessarily hold in oligopolistic Cournot or Stackelberg generalizations. Introducing asymmetries in the cost functions of the banks, or in their way of conduct, may imply counterintuitive effects on the individual banks’ volumes of loans and deposits. Keywords: Bank behavior, Cournot oligopoly, Stackelberg oligopoly

Date: 1999
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Citations: View citations in EconPapers (5)

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Working Paper: Bank behavior and the interbank rate in an oligopolistic market (1999)
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