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01390nam a2200205Ia 4500 |
| 001 |
10.1086-701684 |
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220511s2019 CNT 000 0 und d |
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|a 00223808 (ISSN)
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| 245 |
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|a Search frictions and market power in negotiated-price markets
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| 260 |
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|b University of Chicago Press
|c 2019
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| 856 |
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|z View Fulltext in Publisher
|u https://doi.org/10.1086/701684
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|a We provide a framework for empirical analysis of negotiated-price markets. Using mortgage market data and a search and negotiation model, we characterize the welfare impact of search frictions and quantify the role of search costs and brand loyalty for market power. Search frictions reduce consumer surplus by
|1 2/month/consumer, 28 percent of which can be associated with discrimination, 22 percent with inefficient matching, and 50 percent with search costs. Banks with large consumer bases have margins 70 percent higher than those with small consumer bases. The main source of this incumbency advantage is brand loyalty; however, price discrimination based on search frictions accounts for almost a third. © 2019 by The University of Chicago. All rights reserved.
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|a banking
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|a friction
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|a mortgage lending
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|a price dynamics
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|a Allen, J.
|e author
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|a Clark, R.
|e author
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|a Houde, J.-F.
|e author
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| 773 |
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|t Journal of Political Economy
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