Scandinavian Working Papers in Economics
Working Paper Series,
Sveriges Riksbank (Central Bank of Sweden)
No 185: A Welfare Ranking of Two-Sided Market Regimes
Mats A. Bergman ()
Additional contact information
Mats A. Bergman: Department of Economics, Södertörn University College, Postal: SE-141 89 Huddinge, Sweden
Abstract: Two-sided network effects in card payment systems are analysed under different market structures, e.g., competition, one-sided monopoly, bilateral monopoly and duopoly; with and without an interchange fee; for the so-called Baxter’s case of non-strategic merchants. A partial ranking of market structures according to their welfare effects is provided. Some support is found for the policy adopted by the EU Commission in the competition law case concerning Visa’s interchange fees.
Keywords: Two-sided markets; card payments; payment systems; acquiring; issuing; market structure
30 pages, First version: June 1, 2005. Revised: September 1, 2005.
Full text files
WP_185Revised.pdf
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