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On the Length of the Decision Period under Uncertainty: The Case of the Price-setting Commercial Banking Firm

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The purpose of this essay is to determine how often a price-setting commercial banking firm facing uncertainty should optimally change its loan and deposit rates. Defining the decision period as the span of time over which the banking firm sets and does not intend to alter its interest rates, it examines the relationship between the length of the decision period and the optimizing behavior of the bankig firm under uncertainty.

Abstract

Ⅰ. Introduction

Ⅱ. The Model

Ⅲ. The Maximization Problem

Ⅳ. Conclusion

References

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