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Feedback Loop Effects in Payment Card Markets: Empirical Evidence

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  • Carbó-Valverde Santiago

    (University of Granada andFederal Reserve Bank of Chicago)

  • Liñares-Zegarra José Manuel

    (University of Granada)

  • Rodríguez-Fernández Francisco

    (University of Granada)

Abstract

While some studies have assumed that mature and well-established platforms do not exhibit feedback loop effects, other recent contributions have suggested that these effects may exist. Using a unique database that provides detailed information on both cardholder and merchant sides of the Spanish payment card market, we find empirical evidence of feedback loop effects. We also offer some evidence on the relative value that consumers (merchants) place on network characteristics such as the degree of merchant acceptance (cardholder adoption) and prices.

Suggested Citation

  • Carbó-Valverde Santiago & Liñares-Zegarra José Manuel & Rodríguez-Fernández Francisco, 2012. "Feedback Loop Effects in Payment Card Markets: Empirical Evidence," Review of Network Economics, De Gruyter, vol. 11(2), pages 1-24, June.
    • Handle: RePEc:bpj:rneart:v:11:y:2012:i:2:n:2
    DOI: 10.1515/1446-9022.1268
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    Cited by:

    1. Laine, Liisa T. & Ma, Ching-to Albert, 2017. "Quality and competition between public and private firms," Journal of Economic Behavior & Organization, Elsevier, vol. 140(C), pages 336-353.

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