A discussion of joint bank and industry concentration
Journal Title: Business and Economic Horizons - Year 2018, Vol 14, Issue 2
Abstract
This article examines bank and industry concentration jointly within the static framework of Cournot competition. The general equilibrium is one in which banks form a multiplant monopoly and firm profit is zero. This is an unstable equilibrium because: (A) Firms have an incentive to (i) collude to “fight banks back” in the context of bilateral monopoly bargaining, and/or (ii) modernize their business towards financial independence; (B) Banks’ best response is (i) innovation too, combined with (ii) disciplinary credit rationing.
Authors and Affiliations
Gerasimos Soldatos
Keywords
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- EP ID EP442274
- DOI 10.15208/beh.2018.16
- Views 92
- Downloads 0
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A discussion of joint bank and industry concentration
This article examines bank and industry concentration jointly within the static framework of Cournot competition. The general equilibrium is one in which banks form a multiplant monopoly and firm profit is zero. This is...