Events at CERGE-EI

You can join the seminar in person at the following address:
CERGE-EI, Politických vězňů 7, Praha 1, room 402
or online at: https://cerge-ei.webex.com/cerge-ei/j.php?MTID=m0f9380aed40812d1d74135712d840544
Meeting number: 2744 108 6888
Meeting password: 772636

Presenter: Mari Mtchedlishvili (This email address is being protected from spambots. You need JavaScript enabled to view it.)

Title: "Search Frictions and Consumer Inertia in the Retail Banking Sector"

Abstract: This paper investigates the role of search frictions in explaining consumer inertia in the Dutch retail banking market. Despite the availability of better interest rates from alternative banks, many households continue to save with their incumbent institutions. I aim to study whether this low switching behavior is primarily driven by consumers’ limited awareness of alternatives (search costs) or by frictions incurred after becoming informed (switching costs). Using panel data from the DNB Household Survey, supplemented with publicly available interest rate data, the study explores how limited awareness (cognitive costs of information gathering) and brand familiarity affect switching behavior. The aim is to better understand the drivers of low mobility in retail banking and assess how much information frictions contribute to suboptimal financial outcomes for households.