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Article Dans Une Revue Journal of Developing Areas Année : 2022

Strategic Behavior between a Bank and A Microfinance Institution: The Role of Psychological Distance and Education Level

François Fall
  • Fonction : Auteur
Thanh Tam Nguyen-Huu

Résumé

In Hotelling's fundamental model (1929), the geographical distance and high transportation costs grant firms present in a market a certain power over local buyers in their neighborhoods. Starting from his model, this study shows that in the competition between a bank and a microfinance institution (MFI), geographical distance and transportation costs alone are no longer sufficient for attributing market power to the firms present. In fact, the introduction of psychological distanceand education level in the model alter the Hotelling's results. Psychological proximity (trust) and the educational level of the client play determinant roles in dividing the credit market between a bank and an MFI.
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Dates et versions

hal-04248194 , version 1 (18-10-2023)

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François Fall, Thanh Tam Nguyen-Huu. Strategic Behavior between a Bank and A Microfinance Institution: The Role of Psychological Distance and Education Level. Journal of Developing Areas, 2022, 56 (4), pp.29-41. ⟨10.1353/jda.2022.0062⟩. ⟨hal-04248194⟩
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