Follow the leaders: competition in the Brazilian auto financing sector
This study seeks to understand the competitive pattern and strategy of the firms inthe Brazilian automobile financing market. First, we analyzed the strong segmentationobserved in this market, determining market niches. We then estimated reaction functionsto price changes. The results indicated that...
| Autores: | , |
|---|---|
| Tipo de recurso: | artículo |
| Estado: | Versión publicada |
| Fecha de publicación: | 2014 |
| País: | Brasil |
| Institución: | Universidade de São Paulo (USP) |
| Repositorio: | Estudos Econômicos (São Paulo) |
| Idioma: | inglés |
| OAI Identifier: | oai:revistas.usp.br:article/63981 |
| Acceso en línea: | https://www.revistas.usp.br/ee/article/view/63981 |
| Access Level: | acceso abierto |
| Palabra clave: | reaction functions auto financing leader-follower game market power Funções de reação Financiamento de automóveis Competição líder-seguidor Poder de mercado |
| Sumario: | This study seeks to understand the competitive pattern and strategy of the firms inthe Brazilian automobile financing market. First, we analyzed the strong segmentationobserved in this market, determining market niches. We then estimated reaction functionsto price changes. The results indicated that the three largest companies in thesector have a strong influence on interest rate setting within the entire segment. Thisphenomenon characterizes the competition of this sector as the leader-follower type,rather than Bertrand competition, the latter of which is often expected in the bankingsector and it demonstrates the existence of the leading firms’ market power. |
|---|