Essays on Banking Industry: ATM (Automatic Teller Machine) Market.
详细信息
文摘
In this dissertation,I write three essays on banking ATM industry. In Chapter 1,I estimate the network effect and the change in consumer welfare in the retail banking ATM industry. A crucial issue of incompatibility is that surcharging is harmful to consumers in a cash-withdrawal transaction. Nevertheless,the number of ATMs has risen sharply in spite of the fees for ATM cash-withdrawal services. I use a constructed banking ATM data over the sample period of 2008 and 2009 and the demographic data with cash-withdrawal preferences obtained from the Consumer Payment Choice distributed by Federal Reserve Bank of Boston. Following the discrete choice framework,I find the network effects,induced by surcharging,only in the model interacting with information on cash-withdrawal preferences. Consumers prefer larger banks in the U.S. MSA markets in which a growth ATM for the large banks in incompatibility corresponds to reduction in transportation costs. I find the income loss from surcharging is offset by the increased number of ATM transactions for cash when the number of ATMs rises. The change of consumer welfare in competition induced by incompatibility is increased by 2.99 percent. In chapter 2,I consider the Hotelling 1929) model in which firms compete in location and price choices. In the ATM market,firms location behavior is an important issue in which product differentiation among ATMs occurs through spatial location of firms. Focusing on understanding a strategic decision of a large bank with a network advantage to be able to deploy more ATMs close to location of a small bank,I build on a foreign cash-withdrawal demand for consumers choosing cash-withdrawal services with the lowest delivered price. The two-stage game,in which a quadratic transportation cost is used,and probability choosing cash-withdrawal services is determined exogenously,shows why the large bank raises ATM fees,surcharge and foreign fee above those of its competitor,the small bank. In chapter 3,I explore spatial competition in the ATM market in which banking ATM cash-withdrawal services compete in geographically differentiated location and price. I utilize a spatial model of the SARAR 1,1) that is the spatial autoregressive model with autoregressive disturbance term,while controlling for relevant data such as banking ATM characteristics and consumer demographics in the U.S. Metropolitan Statistical Areas during 2008 and 2009. I find there is spatial competition in the ATM market. The intensified competition in the sample period is found in the case where a consumer chooses an ATM randomly with the lowest delivered price. With the spatial weighing matrix that the bank with multiple branches and ATMs competes with the small or medium banks,I find the increase of the marginal effect on surcharge in which the large bank deploys an additional ATM randomly in the MSA market.