Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/83616
Authors: 
Molnár, József
Nagy, Márton
Horváth, Csilla
Year of Publication: 
2006
Series/Report no.: 
MNB Working Papers 2007/1
Abstract: 
In this paper we analyze the degree of competition in the Hungarian household credit and deposit markets. We estimate discrete-choice, multinomial logit deposit service and loan demand functions for each bank and calculate the corresponding price elasticities. Two models of the banking industry are considered: a static, differentiated product Nash-Bertrand oligopoly (as non-collusive benchmark) and a cartel. With estimated marginal costs and observed interest rates we calculate the price-cost margins and compare these to the theoretically implied ones. We find that in our sample period the competition in the Hungarian banking sector is low, i.e. price-cost margins are high.
Subjects: 
demand
discrete choice
product differentiation
banking
market power
JEL: 
G21
L11
L13
Document Type: 
Working Paper

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