| Author: | Massoud, N. Bernhardt, D. |
| Title: | "Rip-off" ATM surcharges |
| Journal: | RAND Journal of Economics
2002 : SPRING, VOL. 33:1, p. 96-115 |
| Index terms: | PRICING BANKS CONSUMERS CONSUMER CHOICE |
| Language: | eng |
| Abstract: | The authors develop a spatial model in which the authors endogenize both the pricing of ATM services by banks and the choice of home bank and ATM use by consumers. The equilibrium delivers the empirical regularities: Banks set high bank account fees for their own customers but do not charge them for ATM usage; in contrast, banks charge high ATM fees for nonmember users, fees that exceed those levels that would maximize ATM revenues from nonmembers; and larger banks set higher account fees and demand higher surcharges for ATM use than smaller banks. Paradoxically, (i) a bank's ATM revenues may fall short of its costs of ATM provision, and (ii) prohibiting banks from surcharging nonmembers. |
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