<italic>This paper incorporates a Cournot model of oligopoly pricing into Williamson's (1968a) model to assess the welfare effect of a merger that yields economies and market power simultaneously. The results show: (i) in most cases, economies from mergers can offset price increases due to market power...</italic>

In the Newfoundland Bank Crash of 1894, the commercial banks in a duopolistic loan market both went under simultaneously. The banking system was “free”, as central bank, deposit insurance, and lender of last resort were all absent. The objective of this study is to shed light on our...

This paper incorporates a monopolistically competitive market for deposits a la' Salop (1979) into an overlapping generations growth model a la' Diamond (1965). Profit-maximizing banks have incentives to compete for deposits by opening branches or expanding branch networks through mergers and...

A traditional argument against free banking is that it will collapse because of information externalities: it is impossible for depositors to tell whether a high deposit rate offered by a bank is due to its high efficiency or risky lending strategy. This paper shows that in a separating...