TY  - JOUR
AU  - Knittel,Christopher R.
AU  - Stango,Victor
TI  - Strategic Incompatibility in ATM Markets
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 12604
PY  - 2006
Y2  - October 2006
UR  - http://www.nber.org/papers/w12604
L1  - http://www.nber.org/papers/w12604.pdf
N1  - Author contact info:
Christopher R. Knittel
University of California, Davis
Department of Economics
One Shields Ave
Davis, CA 95616
Tel: 530/752-3344
Fax: 530/752-9382
E-Mail: crknittel@ucdavis.edu

Victor Stango
University of California, Davis
Graduate School of Management
One Shields Avenue
Davis, CA 95616
E-Mail: victor.stango@dartmouth.edu
AB  - We test whether firms use incompatibility strategically, using data from ATM markets. High ATM fees degrade the value of competitors' deposit accounts, and can in principle serve as a mechanism for siphoning depositors away from competitors or for creating deposit account differentiation. Our empirical framework can empirically distinguish surcharging motivated by this strategic concern from surcharging that simply maximizes ATM profit considered as a stand-alone operation. The results are consistent with such behavior by large banks, but not by small banks. For large banks, the effect of incompatibility seems to operate through higher deposit account fees rather than increased deposit account base.
ER  -