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Abstract

Market Definition and Market Power in Payment Card Networks: Some Comments and Considerations

The Review of Network Economics

Vol. 5, Issue 1 - March 2006, pp 61 - 71



Author
  Lawrence J. White
Stern School of Business, New York University
E-mail: [email protected]

Abstract
  Antitrust and regulatory concerns swirl around the payment cards industry, for understandable reasons: It is not atomistic; it has network characteristics; it involves two-sided markets; and its two prominent members - Visa and MasterCard - are network joint ventures of the banks that issue cards to consumers and enroll and service the merchants who accept those cards. These characteristics raise the possibility that the industry may not be fully competitive and thus raise potential policy concerns. But these same characteristics also cloud the standard against which the performance of the industry should be judged and complicate the analysis necessary for forming judgments.

Keywords: Two-sided markets, market definition, monopolization

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