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

Authors

Levent Kutlu, The University of Texas Rio Grande ValleyFollow
Robin C. Sickles, Rice University
Mike G. Tsionas, Lancaster University
Emmanuel Mamatzakis, Open University of Cyprus

Document Type

Article

Publication Date

5-4-2022

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.

Comments

Copyright © 2022, The Author(s), under exclusive licence to Springer-Verlag GmbH Germany, part of Springer Nature

https://rdcu.be/cNKnD

Recommended Citation

Kutlu, L., Sickles, R.C., Tsionas, M.G. et al. Heterogeneous decision-making and market power: an application to Eurozone banks. Empir Econ (2022). https://doi.org/10.1007/s00181-022-02239-z

Publication Title

Empirical Economics

DOI

10.1007/s00181-022-02239-z