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The Effect of Mergers in Search Market: Evidence from the Canadian Mortgage Industry / Jason Allen, Robert Clark, Jean-François Houde.
- Format:
- Book
- Author/Creator:
- Allen, Jason.
- Series:
- Working Paper Series (National Bureau of Economic Research) no. w19126.
- NBER working paper series no. w19126
- Language:
- English
- Physical Description:
- 1 online resource: illustrations (black and white);
- Place of Publication:
- Cambridge, Mass. National Bureau of Economic Research 2013.
- Summary:
- We examine the relationship between concentration and price dispersion using variation induced by a merger in the Canadian mortgage market. Since interest rates are determined through a search and negotiation process, consolidation eliminates a potential negotiation part- ner, weakening consumers bargaining positions. We combine reduced-form techniques to es- timate the mergers distributional impact, with a structural model to measure market power across consumers with different search costs. Our results show that competition benefits only consumers at the bottom and middle of the transaction price distribution. Estimates from a search and negotiation model attribute these differences to the presence of large search frictions.
- Notes:
- Print version record
- June 2013.
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