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Zinsdifferenzen, Verhandlungsfähigkeit und Bankenwettbewerb auf einem unvollkommenen Kreditmarkt / Interest Rate Differences, Bargaining Ability, and Imperfect Competition in the Credit Market

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  • Gischer Horst

    (Fachgebiet VWL (Geld und Kredit), Universität Dortmund, Vogelpothsweg 87, D-44227 Dortmund)

Abstract

Regarding empirical interest-rate differences in credit markets the behaviour of borrowers and lenders can be described in a simple model. Banks assume that each debtor has an individual maximum capacity of debt service which leads to an individual budget constraint. Without having precise information on the number or conditions of rival offers banks will take them into consideration. While borrowers have to face search costs equilibrium dispersions of interest rates can be derived that leave a surplus to lenders and will not be diminished by imperfect competition. As a result high rated borrowers can use their bargaining ability to gain favourable credit terms while low rated borrowers pay higher interest rates which, however, doesn’t reflect any kind of risk compensation.

Suggested Citation

  • Gischer Horst, 1995. "Zinsdifferenzen, Verhandlungsfähigkeit und Bankenwettbewerb auf einem unvollkommenen Kreditmarkt / Interest Rate Differences, Bargaining Ability, and Imperfect Competition in the Credit Market," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 214(5), pages 532-556, October.
    • Handle: RePEc:jns:jbstat:v:214:y:1995:i:5:p:532-556
    DOI: 10.1515/jbnst-1995-0503
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