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Friedrich-Alexander-Universität Erlangen-Nürnberg (FAU) >
Institut für Wirtschaftspolitik und Quantitative Wirtschaftsforschung (IWQW), Universität Erlangen-Nürnberg >
IWQW Discussion Paper Series, FAU Erlangen-Nürnberg >
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http://hdl.handle.net/10419/29563
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| Title: | | On the incentives to form strategic coalitions in ATM markets  |
| Authors: | | Wenzel, Tobias |
| Issue Date: | | 2008 |
| Series/Report no.: | | IWQW discussion paper series 05/2008 |
| Abstract: | | This paper studies ATM coalitions in retail banking. We ask when it is profitable for banks to make agreements which ban direct ATM transaction fees. In the case of a coalition banks loose income from ATM transactions but relax competition in the banking market. We find that such agreements are profitable when the interchange fee is sufficiently high. When banks can collude on the interchange they always form a coalition. Coalitions may harm consumers but lead to higher total welfare. Moreover, we find that smaller banks have larger incentives to form ATM coalitions. Investment in ATM networks is typically higher with a coalition. |
| Subjects: | | Banking competition ATM networks collusion |
| JEL: | | L1 G2 |
| Document Type: | | Working Paper |
| Appears in Collections: | | IWQW Discussion Paper Series, FAU Erlangen-Nürnberg
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