Strategic Incompatibility in ATM Markets / Christopher R. Knittel, Victor Stango.

Format:

Book

Author/Creator:

Knittel, Christopher R.

Contributor:

National Bureau of Economic Research.

Stango, Victor.

Series:

Working Paper Series (National Bureau of Economic Research) no. w12604.

NBER working paper series no. w12604

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2006.

Summary:

We test whether firms use incompatibility strategically, using data from ATM markets. High ATM fees degrade the value of competitors' deposit accounts, and can in principle serve as a mechanism for siphoning depositors away from competitors or for creating deposit account differentiation. Our empirical framework can empirically distinguish surcharging motivated by this strategic concern from surcharging that simply maximizes ATM profit considered as a stand-alone operation. The results are consistent with such behavior by large banks, but not by small banks. For large banks, the effect of incompatibility seems to operate through higher deposit account fees rather than increased deposit account base.

Notes:

Print version record

October 2006.