Consumer preferences and market structure in credit card markets : evidence from turkey

Joint Authors

Gulsun Akin, G.
Aysan, Ahmad Faruq
Ozer, Ezgi
Yildiran, Levent

Source

Economic Research Forum : Working Paper Series

Issue

Vol. 2018, Issue 1172-1274 (31 Dec. 2018)35 p.

Publisher

Economic Research Forum for the Arab Countries Iran and Turkey

Publication Date

2018-12-31

Country of Publication

Egypt

No. of Pages

35

Main Topic

Banking and Financial Sciences

Topics

Abstract EN

Using a discrete choice random utility model and unique data from a nationwide consumer survey, we show that consumers view credit cards as highly differentiated products with both bank-level and card-level nonprice features.

They select their credit cards by predominantly considering these nonprice features.

Although they charge higher prices, the majority of consumers choose private banks as issuers due to their bank-level and card-level nonprice benefits.

Consumers who prioritize prices tend to choose participation or public banks.

Product differentiation and bundling seem to underlie banks’ market power in the Turkish credit card market.

Large private banks and public banks reap the benefits of bundling more than the other banks.

Of card-level nonprice features, installments, bonuses/rewards/miles, and the prestige of the card seem to be particularly effective in consumers’ decisions.

We argue that this highly differentiated nature of credit cards can be an alternative explanation for the credit card pricing puzzles.

American Psychological Association (APA)

Gulsun Akin, G.& Aysan, Ahmad Faruq& Ozer, Ezgi& Yildiran, Levent. 2018. Consumer preferences and market structure in credit card markets : evidence from turkey. Economic Research Forum : Working Paper Series،Vol. 2018, no. 1172-1274.
https://search.emarefa.net/detail/BIM-957289

Modern Language Association (MLA)

Gulsun Akin, G.…[et al.]. Consumer preferences and market structure in credit card markets : evidence from turkey. Economic Research Forum : Working Paper Series No. 1172-1274 (Dec. 2018).
https://search.emarefa.net/detail/BIM-957289

American Medical Association (AMA)

Gulsun Akin, G.& Aysan, Ahmad Faruq& Ozer, Ezgi& Yildiran, Levent. Consumer preferences and market structure in credit card markets : evidence from turkey. Economic Research Forum : Working Paper Series. 2018. Vol. 2018, no. 1172-1274.
https://search.emarefa.net/detail/BIM-957289

Data Type

Journal Articles

Language

English

Notes

Includes appendices : p. 30-32

Record ID

BIM-957289