Logo Logo

Market Structure and Competition Among Retail Depository Institutions, Review of Economics and Statistics

Abstract

We assess competition among retail depository institutions in 1,884 rural markets. We estimate a model of equilibrium market structure which endogenizes the operating decisions of three types of depository institutions: multimarket banks, single-market banks and thrift institutions. Observed market structures and a game-theoretic specification of entry behavior identify the parameters of an underlying profit functions. We find strong evidence that product differentiation generates additional profits for retail depository institutions. These profits help to maintain smaller banks and thrifts, even as larger banks expand their operations. Consumers have more options, as more institutions can profitably operate as a result of product differentiation.

Type

Article

Author(s)

Andrew Cohen, Michael Mazzeo

Date Published

2007

Citations

Cohen, Andrew, and Michael Mazzeo. 2007. Market Structure and Competition Among Retail Depository Institutions. Review of Economics and Statistics. 89(1): 60-74.

KELLOGG INSIGHT

Explore leading research and ideas

Find articles, podcast episodes, and videos that spark ideas in lifelong learners, and inspire those looking to advance in their careers.
learn more

COURSE CATALOG

Review Courses & Schedules

Access information about specific courses and their schedules by viewing the interactive course scheduler tool.
LEARN MORE

DEGREE PROGRAMS

Discover the path to your goals

Whether you choose our Full-Time, Part-Time or Executive MBA program, you’ll enjoy the same unparalleled education, exceptional faculty and distinctive culture.
learn more