In a recent paper, Karadima and Louri use frontier-based measures of market power and bank competition in an application to Euro Area banking. The purpose of the present note is to access their paper in a critical way, as there are certain fallacies and errors.

The distinguishing feature of the Bayesian approach in performance evaluation is that parameter uncertainty of the various models is formally taken into account along with model uncertainty as well. The usual sampling-theory approach proceeds conditionally on the parameter estimates that have...