INFORMATION SHARING IN BANKING: AN ANTI-COMPETITIVE DEVICE?

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http://hdl.handle.net/10138/135766
Title: INFORMATION SHARING IN BANKING: AN ANTI-COMPETITIVE DEVICE?
Author: Gehrig, Thomas; Stenbacka, Rune
Belongs to series: 5
ISBN: 951-555-733-X
Abstract: We analyse the institution of information sharing in a model of repeated banking competition. In the presence of switching costs we find that information sharing renders poaching more profitable in future rounds of competition, since the poaching activities can be targeted to creditworthy borrowers. Thus borrower poaching may occur even when it would not be profitable without information sharing. At the same time information sharing reduces relationship benefits, and competition for initial market shares is weakened. Overall we find that information sharing enhances equilibrium profits weakly in general and strictly in the presence of switching cost.
URI: http://hdl.handle.net/10138/135766
Date: 2002-07-01
Subject (ysa): information sharing
poaching
switching costs
credit markets
banking


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