The aggregate Lerner index is a popular composite measure of multi-product banks' market power, based on the assumption that banks' single aggregate output factor is total assets. This study identifies three limitations of the aggregate Lerner index that potentially distort its interpretation as...

In this study we explore market power in 13 EU banking sectors for the years 2007 to 2019 by estimating a structural model with demand and supply equations, where the mark-up of price over marginal cost is parameterized as a measure of banks’ conduct that depends on selected factors. Our...

The Panzar-Rosse H statistic is a commonly used measure of market power in banking. It is widely believed that H0 is inconsistent with significant market power. The theoretical part of this study rigorously disproves this perception. Instead, the possibility of H0 under conditions of substantial...