Empirical Analysis of Balance Transfer Offer---Evidence from Credit Card Market.

详细信息   

• 作者：Yuan ; Yan.
• 学历：Ph.D.
• 年：2013
• 导师：Brusco, Sandro,eadvisorMontgomery, Mark R.,eadvisorZhou, Yiyiecommittee memberYu, Yanecommittee member
• 毕业院校：State University of New York
• Department：Economics
• ISBN：9781303161278
• CBH：3565840
• Country：USA
• 语种：English
• FileSize：2557108
• Pages：146

文摘

In recent decades, the increasing competitions in the credit card industry have led to wide variations of products offered by credit card companies to attract their customers, as well as more elaborate and more complex pricing schemes. This dissertation studies two crucial strategies in this market from companies and consumers sides. The first chapter investigates efficiency differences between two important strategic approaches that credit card companies use to attract customers: the transfer balance check offer and the cash back offer. I analyze these two approaches in terms of their influences on consumers short-term finance. I estimate the two approaches overall and monthly effects on payment, spending, and change of debt in order to capture the consumers dynamic finance conditions. I focus mainly on the promotional interest rate and fixed interest rate parameters in the balance transfer offer. I categorize consumers into seven subgroups based on their characteristics and study how they respond differently to the offers. Finally, I estimate the effects of the balance transfer offer and cash back offers compared with the control, non-promotional finance conditions. I find that the balance transfer offer is a more effective way to impact consumers short-term finance than the cash back offer. The second chapter studies third-degree price discrimination as a strategy to improve profitability. The optimality of credit card company offers is assessed using a dataset containing subsamples of cardholders who have received either randomized or non-randomized balance transfer offers. Using the randomized subsamples, the counterfactual distributions of expected profit streams for any contract offer are directly estimated and the optimality of all balance transfer offers are able to be evaluated. Through further counterfactual analysis from the number of consumers who achieve optimality in each contract, new distribution of consumers is constructed to improve profit. We find that credit card companies target based on multi-objective profit, and we provide a strategy making offers according to consumers characteristics to generate increased profitability.