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Conflicts of interest, information provision, and competition in the financial services industry

Patrick Bolton; Xavier Freixas; Joel Shapiro

Title:
Conflicts of interest, information provision, and competition in the financial services industry
Author(s):
Bolton, Patrick; Freixas, Xavier; Shapiro, Joel
Date:
Type:
Articles
Permanent URL:
Media Type:
application/pdf
Notes:
Journal of Financial Economics, vol. 85, no. 2 (2007), pp. 297-330., , ,
Abstract:
In some markets sellers have better information than buyers over which products best serve a buyer's needs. Depending on the market structure, this may lead to conflicts of interest in the provision of information by sellers. This paper studies this issue in the market for financial services. The analysis presents a new model of competition between banks, where price competition influences the ensuing incentives for truthful information revelation. We also compare conflicts of interest in two different firm structures, specialized banking and one-stop banking.
Subject(s):
conflicts of interest, information provision, one-stop banks, financial advice, Financial services industry,
Item views:
210
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