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JSTOR is a not-for-profit service that helps scholars, researchers, and students discover, use, and build upon a wide range of content in a trusted digital archive. We use information technology and tools to increase productivity and facilitate new forms of scholarship. For more information about JSTOR, please contact support@jstor.org.This study examines the impact of market structure on price and nonprice competition for household customers in commercial banking markets. Using a new survey of bank prices and services in metropolitan areas, we are able to test the effect of firm concentration on a wide range of specific prices as well as on several dimensions of nonprice competition. I. INTRODUCTIONMost of the existing literature has found a weak positive relationship between monopoly power and bank prices. The new data set allows us to improve on these studies in several ways. Although banks are multiproduct firms, most studies have been limited to analyzing prices on a single bank product. Such studies have analyzed business loan rates [3, 11, 14], consumer loan rates [6], and demand deposit service charges [1] . By considering only one price, the studies may well be underestimating the total impact of monopoly power on bank performance.Studies that have analyzed the impact of market structure on a whole series of price variables have been hampered by deficiencies in available data that consist of yearly averages of prices [12,16] . For these studies, the banking product is not defined in a homogeneous manner (e.g. differences in loan size or quality are not considered). Similarly, the studies of the stlucture profWltability relationship [2, 8, 12, 16] may be underestimating the impact of market structure on profits, because banks with monopoly power may choose to trade high profits for reduced risk via *The authors wish to thank a referee for valuable comments on an earlier draft and Janice Decker for her help in the statistical work in this study.

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