To Surcharge or Not To Surcharge? A Two-Sided Market Perspective of the No-Surcharge Rule

To Surcharge or Not To Surcharge? A Two-Sided Market Perspective of the No-Surcharge Rule Date: 2011-08 By: Nicholas Economides (Stern School of Business, New York University) David Henriques (Nova School of Business and Economics) URL: http://d.repec.org/n?u=RePEc:net:wpaper:1103&r=net In Electronic Payment Networks (EPNs) the No-Surcharge Rule (NSR) requires that merchants charge the same final good price regardless of the means of payment chosen by the customer. In this paper, we analyze a three-party model (consumers, merchants, and proprietary EPNs) to assess the impact of a NSR on the electronic payments system, in particular, on competition among EPNs, network pricing to merchants and consumers, EPNs’ profits, and social welfare. We show that imposing a NSR has a number of effects. First, it softens competition among EPNs and rebalances the fee structure in favor of cardholders and to the detriment of merchants. Second, we show that the NSR is a profitable strategy for EPNs if and only if the network effect from merchants to cardholders is sufficiently weak. Third, the NSR is socially (un)desirable if the network externalities from merchants to cardholders are sufficiently weak (strong) and the merchants’ market power in the goods market is sufficiently high (low). Our policy advice is that regulators should decide on whether the NSR is appropriate on a market-by-market basis instead of imposing a uniform regulation for all markets. Keywords: Electronic Payment System, Market Power, Network Externalities, No-Surcharge Rule, Regulation, Two-sided Markets, MasterCard, Visa, American Express, Discover. JEL: L13

 

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由To Surcharge or Not To Surcharge? A Two-Sided Market Perspective of the No-Surcharge Rule.

Technology adoption in markets with network effects: Theory and experimental evidence

YNY:

1. 文證明用 risk-dominance Nash 可解釋

Q: (待查 maximin criterion）

作者預期: (p.21)…An alternative with a low critical mass is likely to have an advantage in the beginning  …As the game proceeds, one may expect that participants’ ability to coordinate their choices increases, which should reduce the importance of riskiness for participants’ choices.

==引文＝＝

risk dominance  Nash equilibria

Harsanyi and Selten (1988) develop the concept of risk dominance as a refnement criterion in games with multiple Nash equilibria. In short, that theory selects the Nash equilibrium in which players choose less risky strategies

==references=

Suleymanova, Irina, and Christian Wey. “On the role of consumer expectations in markets with network effects." Journal of Economics 105.2 (2012): 101-127. (link to 本站)

 

==原文==

Keser, Claudia, Suleymanova, Irina, and  Wey, Christian (2011) “Technology adoption in markets with network effects: Theory and experimental evidence." DICE discussion paper No. 33, Germany. link to PDF

Date:	2011
By:	Keser, Claudia Suleymanova, Irina Wey, Christian
URL:	http://d.repec.org/n?u=RePEc:zbw:dicedp:33&r=net
	We examine a technology adoption game with network effects in which coordination on technology A and technology B constitute a Nash equilibrium. Coordination on technology B is assumed to be payoff-dominant. We define a technology’s critical mass as the minimum share of users necessary to make the choice of this technology a best response for any remaining user. We show that the technology with a lower critical mass is risk-dominant and is chosen by the maximin criterion. We present experimental evidence that both pay-off dominance and risk dominance explain participants’ choices. The relative riskiness of a technology can be proxied using technologies’ critical masses or stand-alone values. —
Keywords:	Network Effects,Critical Mass,Coordination,Riskiness
JEL:	C72

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Distinguishing informational cascades from herd behavior in the laboratory

Distinguishing informational cascades from herd behavior in the laboratory

Bo ̆açhan Çelen and Shachar Kariv (2004) The American Economic Review, 2004 – ingentaconnect.com

… circumstances. While the terms informational cascade and herd behavior are used

interchange- ably in the literature, Lones Smith and Peter N. Sørensen (2000)

emphasize that there is a significant difference between them. …

Smith and Sørensen (2000) emphasize that there is a significant difference between them. An informational cascade is said to occur when an infinite sequence of individuals ignore their private information when making a decision, whereas herd behavior occurs when an infinite sequence of individuals make an identical decision, not necessarily ignoring their private information.

被引用 139 次 – 相關文章 – 全部共 27 個版本; berkeley.edu 提供的 [PDF]

由Lones Smith and Peter N.Sørensen 2000 – Google 學術搜尋.