Using consumer search cost and loyalty to explain dispersion in banking fees

• Ano de defesa: 2011
• Autor(a) principal: Lopes, Manuela Hungerbühler
• Orientador(a): Braido, Luís Henrique Bertolino
• Tipo de documento: Dissertação
• Tipo de acesso: Acesso aberto
• Idioma: eng
• Palavras-chave em Português: Banking fees; Lealdade de consumidores; Dispersão de preços; Custos de busca; Tarifas bancárias
• Palavras-chave em Inglês: Search costs; Consumer loyalty; Price dispersion
• Link de acesso: https://hdl.handle.net/10438/9496

Prices of a homogenous package of services present considerable dispersion across banks. A simple model that uses consumer search costs and loyalty is devolped in order to reproduce this empirical observation. Using data for the brazilian banking sector, empirical exercises are performed to allow for: (i) the estimation of consumer search costs by xing the values of other parameters; and (ii) the estimation of the corresponding deadweightlosses imposed by costly search. When only 80% of the population is free to engage in search activity, at a 0.5% monthly interest rate, the upper limit of the support of the search cost distribution is found to be 1805.80 BRL. In this case, the corresponding estimate of the deadweightloss imposed on an average searcher is 233.71 BRL.