Switching Costs in the Deposit Market
This paper derives switching costs endogenously as a trade-off between service quality and the interest rate faced by a depositor who values the services provided by banks. In a market with known interest rates and uncertain service, the depositor must locate satisfactory bank service. The depositor who establishes a good reputation with the satisfactory bank enjoys improved relationship-specific service. The improvement produces utility gains from remaining with the bank. These gains result in trade-off. In the long-run of this market, when banks are forward looking, such switching costs facilitate monopsonistic determination of deposit rates. Copyright 1994 by Royal Economic Society.
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Volume (Year): 104 (1994)
Issue (Month): 423 (March)
|Contact details of provider:|| Postal: |
Phone: +44 1334 462479
Web page: http://www.res.org.uk/
More information through EDIRC
|Order Information:||Web: http://www.blackwellpublishers.co.uk/asp/journal.asp?ref=0013-0133|
When requesting a correction, please mention this item's handle: RePEc:ecj:econjl:v:104:y:1994:i:423:p:455-61. See general information about how to correct material in RePEc.
If references are entirely missing, you can add them using this form.