Abstrakt
In markets with switching costs, firms increase their price as their market share grows. I study the effect of entry on these price dynamics in the Dutch mortgage market. Since en- try occurred in a subset of markets, I control for market-level shocks with a differences-in- differences strategy. Moreover, I exploit the multi-product nature of incumbents to control for unobserved firm-level differences. Consistent with a simple theoretical framework, banks with more locked-in customers decrease their interest rates less after entry. This can explain why policies that encourage competition often disappoint in markets with switching costs. I also discuss implications for competition policy.
Originalsprog | Engelsk |
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Publikationsdato | 2019 |
Antal sider | 36 |
Status | Udgivet - 2019 |
Begivenhed | 46th Annual Conference of the European Association for Research in Industrial Economics. EARIE 2019 - Ciutadella of the Universitat Pompeu Fabra, Barcelona, Spanien Varighed: 30 aug. 2019 → 1 sep. 2019 Konferencens nummer: 46 https://www.barcelonagse.eu/earie2019 |
Konference
Konference | 46th Annual Conference of the European Association for Research in Industrial Economics. EARIE 2019 |
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Nummer | 46 |
Lokation | Ciutadella of the Universitat Pompeu Fabra |
Land | Spanien |
By | Barcelona |
Periode | 30/08/2019 → 01/09/2019 |
Internetadresse |