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Testing for Pricing Behavior in the Mortgage Loan Market

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  • Haerang Park

Abstract

This study examines the pricing behavior of banks in the mortgage loan market. Firstly, the paper compares the loan pricing behavior of banks between two periods, one of which is marked as a more competitive state due to regulatory intervention. Secondly, the paper also test for the stock market reaction to model‐implied collusive profits. Using data from banks in Korea, the paper find that mortgage loan rates are more consistent with cooperative pricing behavior than independent pricing behavior in the period from 2006 to 2012.

Suggested Citation

  • Haerang Park, 2021. "Testing for Pricing Behavior in the Mortgage Loan Market," Asian Economic Journal, East Asian Economic Association, vol. 35(3), pages 270-293, September.
    • Handle: RePEc:bla:asiaec:v:35:y:2021:i:3:p:270-293
    DOI: 10.1111/asej.12247
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    References listed on IDEAS

    as
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