Bargaining Between the Client and the Bank and Game Theory

  • Martina Hedvicakova
  • Pavel PrazakEmail author
Conference paper
Part of the Lecture Notes in Business Information Processing book series (LNBIP, volume 341)


Czech banking market is specific for its high percentage of earnings from bank charges as a total percentage of bank earnings. This article is focused on the problems associated with bargaining between bank clients and banking institutions in the Czech Republic. With most banks in the market, bank clients must pay monthly charges in order to maintain their bank accounts. The article describes the interaction between the bank and the client from the game theory perspective. Both bargaining parties have different goals and they encounter each other during the bargaining process about the price of bank charges. The game theory defines the pay-off function, the decision tree and the point of conflict. The result is a model of this interaction that appears as an extensive form game. The actual amount of charges that result from the bargaining is regularly ascertained by a national survey using the Client Index (Klientský index) for current accounts in the Czech Republic. The Client Index represents the quantification of average costs of maintaining a current account of individual respondents based on the monitoring of specific retail banking products and services according to fee schedules of individual banks and the behaviour of individual bank clients. The approximation of the value of this Client Index was used for the proposal of pay-off function in the model. The paper also deals with general theoretical bases of bargaining, particularly it focused on bargaining with a client. The cooperative and non-cooperative strategy towards the client are described. The reasons for bargaining with existing bank clients are presented as well. Finally the article also summarizes both the goals of clients and banks during bargaining.


Bank Game theory Client Client Index Bargaining Pay-off matrix Decision tree Bank charges 



This paper is supported by specific project No. 2103 (2018) “Investment evaluation within concept Industry 4.0” at Faculty of Informatics and Management, University of Hradec Kralove, Czech Republic. In addition, the authors thank Martin Kral for his help with the project.


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Authors and Affiliations

  1. 1.Faculty of Informatics and ManagementUniversity of Hradec KrálovéHradec KraloveCzech Republic

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