Bank behavior and the interbank rate in an oligopolistic market

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    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
    Originele taal-2English
    Plaats van productieGroningen
    UitgeverUniversity of Groningen, SOM research school
    Aantal pagina's15
    StatusPublished - 1999

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