Dam, Kaniska; Sanchez-Pages, Santiago - School of Economics, University of Edinburgh - 2004
deposits by offering deposit rates. We show that when the market concentration is low, banks invest in the gambling asset. On … the other hand, for sufficiently high levels of market concentration, all banks choose the prudent asset to invest in, and … some depositors may even be left out of the market. Our results suggest a discontinuous relation between market …