A Note on Bank Behavior and Monetary Policies in an Oligopolistic Market

Shota Yamazaki and Hiroaki Miyamoto
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Shota Yamazaki: Graduate School of Economics, Keio University
Hiroaki Miyamoto: Graduate School of Economics, Keio University

Industrial Organization from University Library of Munich, Germany

Abstract: We extend Freixas and Rochet (1997) to two-stage game: In the first stage each bank simultaneously decides on amounts of deposits. Then each bank decides on loan amounts in the second stage. Each stage is a Cournot game in quantity. Scope economies between loans and deposits also arise explicitly in our model. We show that in the case where large economies of scope an increase in the interbank interest rate leads to an decrease in the interest rate on deposits and to an increase in the interest rate on loans.

Keywords: Bank behavior; Strategic effects; Monetary policies; Scope economies (search for similar items in EconPapers)
JEL-codes: D43 G21 L13 (search for similar items in EconPapers)
Pages: 14 pages
Date: 2004-08-10
New Economics Papers: this item is included in nep-cba
Note: Type of Document - pdf; pages: 14
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Citations: View citations in EconPapers (5)

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Persistent link: https://EconPapers.repec.org/RePEc:wpa:wuwpio:0408003

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