Follow the leaders: competition in the Brazilian auto financing sector
This study seeks to understand the competitive pattern and strategy of the firms in the Brazilian automobile financing market. First, we analyzed the strong segmentation observed in this market, determining market niches. We then estimated reaction functions to price changes. The results indicated...
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| Autores principales: | , |
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| Formato: | article |
| Lenguaje: | EN PT |
| Publicado: |
Universidade de São Paulo
2014
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| Materias: | |
| Acceso en línea: | https://doaj.org/article/903da5d431d1434eb42721cf64cf9d26 |
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| Sumario: | This study seeks to understand the competitive pattern and strategy of the firms in
the Brazilian automobile financing market. First, we analyzed the strong segmentation
observed in this market, determining market niches. We then estimated reaction functions
to price changes. The results indicated that the three largest companies in the
sector have a strong influence on interest rate setting within the entire segment. This
phenomenon characterizes the competition of this sector as the leader-follower type,
rather than Bertrand competition, the latter of which is often expected in the banking
sector and it demonstrates the existence of the leading firms’ market power.
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