A non-parametric framework for testing the existence of aggregates is developed. The framework is based on the notion of the maximum entropy formalism which is applied to model the size distribution of firms. The theory, once presented, is applied to the US banking industry in order to test for...

Faced with the choice between preserving and developing a natural resource in the presence of uncertain environmental externalities, the social return to undertaking development is stochastic. When development is irreversible and the decision-maker can defer commencement, there is value to new...

The distinction between retail and corporate banking markets is of much importance in real life banking organizations. The two markets differ with respect to concentration, the importance of informational asymmetries, and the extent of customer mobility. Within a standard conjectural variation...

This paper studies strategies pursued by banks in order to differentiate their services and soften competition. More specifically we analyse whether bank's ability to avoid losses, its capital ratio, or bank size can be used as strategic variables to make banks different and increase the...

We introduce a model analyzing how asymmetric information problems in a bank-loan market may evolve over the age of a borrowing firm. The model predicts a life-cycle pattern for banks' interest rate markup. Young firms pay a low or negative markup, thereafter the markup increases until it falls...

We derive empirical implications from a stylized theoretical model of bankborrower relationships. Banks' interest rate markups are predicted to follow a life-cycle pattern over the borrowing firms' age. Due to endogenous bank monitoring by competing banks, borrowing firms initially face a low...

Persistent shifts in equilibria are likely to arise in oligopolistic markets and may be detrimental to the measurement of conduct, related markups and intensity of competition. We develop a cointegrated VAR (vector autoregression) based approach to detect long-run changes in conduct when data...

We analyze the effect of mergers on various aspects of airline performance during the period 1970-84, using a panel data set constructed by Caves et al. Estimates derived from a simple "matched pairs" statistical model indicate that these mergers were associated with reductions in unit cost. The...