Access

You are not currently logged in.

Access your personal account or get JSTOR access through your library or other institution:

login

Log in to your personal account or through your institution.

Multimarket Contact in Banking

STEVEN J. PILLOFF
Review of Industrial Organization
Vol. 14, No. 2 (March 1999), pp. 163-182
Published by: Springer
Stable URL: http://www.jstor.org/stable/41798854
Page Count: 20
  • More info
  • Cite this Item
Multimarket Contact in Banking
Preview not available

Abstract

According to linked oligopoly theory, the anticipated effect of multimarket contact is reduced competition. Specifically, the theory predicts that contact lowers competition by reducing the benefit of aggressive action in any single market by providing rivals with the opportunity to retaliate in multiple common markets. The results of this paper are consistent with the theory. In banking, contact is positively related to profitability. Although the economic impact of this relationship is unimportant for most institutions, the relationship is meaningful for the small group of banks most heavily exposed to contact. This finding suggests that the importance of contact may rise as consolidation of the banking industry continues.

Page Thumbnails

  • Thumbnail: Page 
[163]
    [163]
  • Thumbnail: Page 
164
    164
  • Thumbnail: Page 
165
    165
  • Thumbnail: Page 
166
    166
  • Thumbnail: Page 
167
    167
  • Thumbnail: Page 
168
    168
  • Thumbnail: Page 
169
    169
  • Thumbnail: Page 
170
    170
  • Thumbnail: Page 
171
    171
  • Thumbnail: Page 
172
    172
  • Thumbnail: Page 
173
    173
  • Thumbnail: Page 
174
    174
  • Thumbnail: Page 
175
    175
  • Thumbnail: Page 
176
    176
  • Thumbnail: Page 
177
    177
  • Thumbnail: Page 
178
    178
  • Thumbnail: Page 
179
    179
  • Thumbnail: Page 
180
    180
  • Thumbnail: Page 
181
    181
  • Thumbnail: Page 
182
    182