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Please use this identifier to cite or link to this item:
http://hdl.handle.net/2451/26065
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| Title: | Market Definition and Market Power in Payment Card Networks: Some
Comments and Considerations |
| Authors: | White, Lawrence J. |
| Keywords: | Antitrust
regulation
market definition,
market power
mergers
monopolization
payment networks |
| Issue Date: | 2006 |
| Series/Report no.: | EC-06-03 |
| Abstract: | Antitrust and regulatory concerns continue to swirl around the payment
cards industry, for understandable reasons: The industry is clearly not
atomistic in structure; it has substantial network characteristics and
thus embodies network externalities; it involves two-sided markets; and
its two most prominent members -- Visa and MasterCard -- are network
joint ventures of the banks that issue credit and debit cards to
individual cardholders and that enroll (acquire) and service the
merchants who accept those cards. These characteristics raise the
possibility that the industry may not be fully competitive that market
power may currently be present and/or may prospectively be created or
enhanced as a consequence of a merger and thus raise potential policy
concerns. But these same characteristics also cloud the standard against
which the performance of the industry should be judged. And they
complicate the analysis that is necessary to form judgments. This essay
attempts to clarify some of these issues while exploring the same themes
as does Emch and Thompson (2006): market definition, market power, and
payment card networks. |
| URI: | http://hdl.handle.net/2451/26065 |
| Appears in Collections: | Economics Working Papers
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