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Competition in Credit Markets

A theoretic analysis

  • Authors
  • Michael Tröge

Part of the Beiträge zur betriebswirtschaftlichen Forschung book series (BBFDUV, volume 94)

Table of contents

  1. Front Matter
    Pages I-XIII
  2. Michael Tröge
    Pages 1-8
  3. Michael Tröge
    Pages 9-32
  4. Michael Tröge
    Pages 33-50
  5. Michael Tröge
    Pages 51-59
  6. Michael Tröge
    Pages 61-78
  7. Back Matter
    Pages 79-117

About this book

Introduction

Competition in credit markets is different from competition in simple product markets. The allocation of capital is not only determined by its price, but banks actively decide to whom they will provide finance. In addition, the provision of credit is not a spot transaction, but extends over a certain period of time. Banks need to acquire information in order to efficiently screen borrowers before providing credit and to monitor them during the credit relationship to make sure that the credit will be paid back.

Michael Tröge develops game-theoretic and auction-theoretic models for the strategic interaction of banks in the credit market. He shows that in narrow oligopolies only one bank will carry out detailed creditworthyness tests for a firm and that in very competitive markets information about a borrower´s quality can reduce a bank´s profit. The author also points out that equity ownership of a bank increases the expected interest rates for a firm and that a bank´s concern for a good reputation may lead to credit rationing.

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Keywords

Acquisition Auktionstheorie Banken Bankenregulierung Beiträge zur betriebswirtschaftlichen Forschung Wettbewerb competition information

Bibliographic information

  • DOI https://doi.org/10.1007/978-3-663-08310-8
  • Copyright Information Gabler Verlag | Springer Fachmedien Wiesbaden GmbH, Wiesbaden 2001
  • Publisher Name Deutscher Universitätsverlag, Wiesbaden
  • eBook Packages Springer Book Archive
  • Print ISBN 978-3-8244-9048-6
  • Online ISBN 978-3-663-08310-8
  • Buy this book on publisher's site