Discriminatory fees, coordination and investment in shared ATM networks
AbstractThis paper empirically examines the effects of discriminatory fees on ATM investment and welfare, and considers the role of coordination in ATM investment between banks. Our main findings are that foreign fees tend to reduce ATM availability and (consumer) welfare, whereas surcharges positively affect ATM availability and the different welfare components when the consumers' price elasticity is not too large. Second, an organization of the ATM market that contains some degree of coordination between the banks may be desirable from a welfare perspective. Finally, ATM availability is always higher when a social planner decides on discriminatory fees and ATM investment to maximize total welfare. This implies that there is underinvestment in ATMs, even in the presence of discriminatory fees
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Bibliographic InfoPaper provided by National Bank of Belgium in its series Working Paper Research with number 184.
Length: 54 pages
Date of creation: Jan 2010
Date of revision:
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investment; coordination; ATMs; network industries; empirical entry models; spatial discrete choice demand models;
Find related papers by JEL classification:
- G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
- L10 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - General
- L50 - Industrial Organization - - Regulation and Industrial Policy - - - General
- L89 - Industrial Organization - - Industry Studies: Services - - - Other
This paper has been announced in the following NEP Reports:
- NEP-ALL-2010-03-13 (All new papers)
- NEP-BAN-2010-03-13 (Banking)
- NEP-COM-2010-03-13 (Industrial Competition)
- NEP-DCM-2010-03-13 (Discrete Choice Models)
- NEP-MKT-2010-03-13 (Marketing)
- NEP-NET-2010-03-13 (Network Economics)
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