Nonbanks in the payments system: vertical integration issues
We discuss and evaluate the incentives for vertical expansion and vertical mergers in the payments systems industry paying particular attention to the implications of the existence of network effects in this industry. We assess the incentives of large merchants to extend vertically into payments systems, noting that this incentive is maximized when there is significant market power in payments systems and merchants are not sufficiently compensated for the business they bring to the network.
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Volume (Year): (2007)
Issue (Month): ()
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- Nicholas Economides, 2005.
"The Incentive for Vertical Integration,"
05-01, New York University, Leonard N. Stern School of Business, Department of Economics.
- Rochet Jean-Charles & Tirole Jean, 2003. "An Economic Analysis of the Determination of Interchange Fees in Payment Card Systems," Review of Network Economics, De Gruyter, vol. 2(2), pages 1-11, June.
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- Terri Bradford & Matt Davies & Stuart E. Weiner, 2002. "Nonbanks in the payments system," Payments System Research Working Paper PSR WP 02-02, Federal Reserve Bank of Kansas City.
- Economides, N., 2001.
"The Microsoft Antitrust Case,"
New York University, Leonard N. Stern School Finance Department Working Paper Seires
01-00, New York University, Leonard N. Stern School of Business-.
- Nicholas Economides, 2001. "The Microsoft Antitrust Case: Rejoinder," Journal of Industry, Competition and Trade, Springer, vol. 1(1), pages 71-79, March.
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