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Heterogeneous decision-making and market power: an application to Eurozone banks

Mamatzakis, Emmanuel and Tsionas, M.G. and Sickles, R.C. and Kutlu, L. (2022) Heterogeneous decision-making and market power: an application to Eurozone banks. Empirical Economics 63 , pp. 3061-3092. ISSN 0377-7332.

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Abstract

We provide a structural model wherein the decision-makers are payoff maximizers in a general game theoretic setting in which heterogeneity is formally factored into the decisions of the players. The decision-makers are allowed to have different groups; and parameters are the same within each group but they differ across group. Using insights from our treatment of heterogeneous and strategic decision-making, we estimate the conducts (market powers) of Eurozone banks for years 2002-2015. We find that Eurozone banks are fairly competitive. However, banks in peripheral countries have more market power compared to the core of Eurozone.

Metadata

Item Type: Article
Keyword(s) / Subject(s): Conduct parameter, Heterogeneity, Market power, Eurozone banks, Profit function
School: Birkbeck Faculties and Schools > Faculty of Business and Law > Birkbeck Business School
Research Centres and Institutes: Accounting and Finance Research Centre
Depositing User: Emmanuel Mamatzakis
Date Deposited: 07 Jun 2022 10:52
Last Modified: 15 Apr 2025 01:21
URI: https://eprints.bbk.ac.uk/id/eprint/48277

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