SWITCHING COST AND DEPOSIT DEMAND IN CHINA

• 成果类型: Article
• 署名作者: Ho, Chun-Yu
• 署名单位: Shanghai Jiao Tong University
• 刊物名称: INTERNATIONAL ECONOMIC REVIEW
• ISSN/ISSBN: 0020-6598
• DOI: 10.1111/iere.12120
• 发表日期: 2015
• 页码: 723-749
• 关键词: State-owned enterprises; financial intermediation; consumer welfare; banking reform; MARKET; institutions; replacement; bureaucrats; experience; EFFICIENCY

摘要

This article develops and estimates a dynamic model of consumer demand for deposits in which banks provide differentiated products and product characteristics that evolve over time. The switching cost is 0.8% of the deposit's value, which leads the static model to bias the demand estimates. The dynamic model shows that the price elasticity over a long time horizon is larger than the same elasticity over a short time horizon. Counterfactual experiments with a dynamic monopoly show that reducing the switching cost has a comparable competitive effect on bank pricing as a result of reducing the dominant position of the monopoly.