The Lerner Index as a Measure of Market Power of U.S. Credit Unions in the Absence of Profit Maximization

Authors

  • Tobias Vervliet University of Groningen

Abstract

This paper explores the theoretical implications of a change in the behavioral assumptions of the Lerner index in the case of U.S. credit unions which do not operate under profit maximization. Despite the finding that the Lerner index underestimates the actual degree of market power in this non standard case, the value found for credit unions is significantly higher than for commercial banks. In other words, credit unions behave relatively monopolistically.

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Published

2015-11-20

Issue

Section

Economics & Social Sciences