Economics at your fingertips  

Multimarket Contact in Italian Retail Banking: Competition and Welfare

Jozsef Molnar (), Roberto Violi and Xiaolan Zhou

MPRA Paper from University Library of Munich, Germany

Abstract: This paper studies banks' competitive behavior on the deposit side of the Italian retail banking industry. We use a structural model to estimate demand for deposit services and test several supply models. We find that both the competitive, differentiated product Bertrand and the perfectly collusive models are rejected against partially collusive models with coalitions based on the participants' market contact. In the best fitting collusive model, the coalition includes 8 banks with at least 19 overlapped regions. Banks with extensive multi-market contacts tend to be less competitive and behave as if they were maximizing their profit jointly, taking into account the competitive fringe of smaller banks.

Keywords: Competition; Multi-market contacts; Retail banking; Welfare analysis (search for similar items in EconPapers)
JEL-codes: C52 D43 G21 L13 (search for similar items in EconPapers)
Date: 2010-10, Revised 2013-05
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (17) Track citations by RSS feed

Forthcoming in International Journal of Industrial Organization 5.31(2013): pp. 368-381

Downloads: (external link) original version (application/pdf)

Related works:
Journal Article: Multimarket contact in Italian retail banking: Competition and welfare (2013) Downloads
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:

Access Statistics for this paper

More papers in MPRA Paper from University Library of Munich, Germany Ludwigstraße 33, D-80539 Munich, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Joachim Winter ().

Page updated 2023-11-11
Handle: RePEc:pra:mprapa:48610