<![CDATA[This paper analyses the influence of economic crisis and the subsequent reforms on the oligopolistic nature of the Indonesian banking industry. Since the crisis, there have beensubstantial changes in competitive environment. How did these changes affect a banking industry in which the three teen largest banks accounted for over 70 per cent of market share? To estimate the degree of competition, we apply Bresnahanâs (1989) conjectural variation model. Using estimation models based on microeconomic foundations, this method allows us to derive the index of the firmâs market power that is calculated as the deviation of the market piece from the marginal coat as known as Lerner index. Theestimated indicates that the Lerner index showed a rising trend in the post-crisis period. This result indicates the possibility of a decline in the degree of competition.Keywords: Indonesian banking industry, degree of competition, Brenahanâs conjectural variation, Lerner index.]]>
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