Wong, Kit Pong - In: Economic Modelling 28 (2011) 6, pp. 2483-2487
This paper examines the optimal bank interest margin, i.e., the spread between the loan rate and the deposit rate of a bank, when the bank is not only risk-averse but also regret-averse. Regret-averse preferences are characterized by a utility function that includes disutility from having chosen...