A framework for regulating automated teller machine technology

This article specifies and estimates a logit model of ATM adoption by commercial banks. The model provides evidence that permissive sharing laws increase the odds of adoption, which suggests that the antitrust laws may impede the efficient diffusion of the technology. The model also provides evidence that mandatory access laws decrease the odds of adoption for small banks. This suggests that the benefit of such laws in terms of promoting competition in the banking market may be offset by the cost of slower technological diffusion. Finally the model provides evidence that banking markets overlap to a varying degree, which implies that banks compete on the dimensions of price and location. This evidence suggests that mandatory access laws are a more appropriate policy tool when competing banks provide services at similar locations, and permissive sharing laws are more appropriate when competing banks are differentiated by location.