Market Power And Willingness To Pay In Network Industries: Evidence From Payment Cards Within Multiproduct Banking
AbstractTheoretical contributions on network industries have been numerous. However, there is a lack of sufficient empirical evidence which would assist related policymaking. This is the case of payment cards markets. This paper employs a unique database to analyze changes in market power and consumers' willingness to pay resulting from the introduction of payment cards in a multiproduct banking technology. Our findings indicate that any rise in bank market power from payment cards is associated to a greater increase in consumers' willingness to pay. Any antitrust intervention which does not take into account such welfare effects could be misguided.
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Bibliographic InfoPaper provided by Faculty of Economics and Business (University of Granada) in its series FEG Working Paper Series with number 07/01.
Length: 54 pages
Date of creation: 03 Nov 2007
Date of revision:
Card payments; bank market power; willingness to pay; multiproduct technology; network industries.;
Find related papers by JEL classification:
- D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
- D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
- G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
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