00000nam 2200000zi 4500 9.888262 CaOODSP 20240829103637 m o d f cr |n||||||||| 200615t20202020oncd ob f000 0 eng d CaOODSP eng rda CaOODSP n-cn--- FB3-5/2020-22E-PDF Allen, Jason, author. Dynamic competition in negotiated price markets / by Jason Allen and Shaoteng Li. Ottawa, Ontario, Canada : Bank of Canada = Banque du Canada, 2020. ©2020 1 online resource (52 pages) : graphs (mostly colour). text txt rdacontent computer c rdamedia online resource cr rdacarrier Staff working paper = Document de travail du personnel, 1701-9397 ; 2020-22 Cover title. "Last updated: June 4, 2020." Includes bibliographical references (pages 44-47). "This paper develops a framework for investigating dynamic competition in markets where price is negotiated between an individual customer and multiple firms repeatedly. Using contract-level data for the Canadian mortgage market, we provide evidence of an "invest-then-harvest" pricing pattern: lenders offer relatively low interest rates to attract new borrowers and poach rivals' existing customers, and then at renewal charge interest rates which can be higher than what may be available through other lenders in the marketplace. We build a dynamic model of price negotiation with search and switching frictions to capture key market features. We estimate the model and use it to investigate (i) the effects of dynamic competition on borrowers' and banks' payoffs, (ii) the implications of dynamic versus static settings for merger-studies, and (iii) the impacts from recent Canadian macroprudential policies"--Abstract. Real estate business Economic aspects Canada. Mortgages Rates Canada. Competition Government policy Canada. Immobilier Aspect économique Canada. Hypothèques Tarifs Canada. Concurrence Politique gouvernementale Canada. Bank of Canada, issuing body. Staff working paper (Bank of Canada) 1701-9397 ; 2020-22. (CaOODSP)9.806221 PDF 3.28 MB https://publications.gc.ca/collections/collection_2020/banque-bank-canada/FB3-5-2020-22-eng.pdf