Equilibrium in two-sided markets for payments : consumer awareness and the welfare cost of the interchange fee / by Kim P. Huynh, Gradon Nicholls and Oleksandr Shcherbakov.: FB3-5/2022-15E-PDF
"The market for payments is an important two-sided one, where consumers benefit from increased merchant acceptance of payment cards and vice versa. The dependence between the decisions that are made on each side of the market results in various network externalities that are often discussed but rarely quantified. We construct and estimate a structural two-stage model of equilibrium in a market for payments in order to quantify the network externalities and identify the main determinants of consumer and merchant decisions. The estimation results suggest significant heterogeneity in consumer adoption costs and benefits. We discuss the critical characteristics that determine which payment instrument is used at the point of sale. Our counterfactual simulation measures the degree of excessive intermediation by credit card providers"--Abstract, page ii.
Permanent link to this Catalogue record:
publications.gc.ca/pub?id=9.909445&sl=0
| Department/Agency | Bank of Canada, issuing body. |
|---|---|
| Title | Equilibrium in two-sided markets for payments : consumer awareness and the welfare cost of the interchange fee / by Kim P. Huynh, Gradon Nicholls and Oleksandr Shcherbakov. |
| Series title | Staff working paper = Document de travail du personnel, 1701-9397 ; 2022-15 |
| Publication type | Series - View Master Record |
| Language | [English] |
| Format | Electronic |
| Electronic document | |
| Note(s) | "Last updated: March 22, 2022." Includes bibliographical references. Includes abstracts in English and French. |
| Publishing information | [Ottawa] : Bank of Canada = Banque du Canada, 2022. ©2022 |
| Author / Contributor | Huynh, Kim P., 1974- author. |
| Description | 1 online resource (ii, 52 pages) : illustrations (some colour). |
| Catalogue number |
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| Subject terms | Payment -- Econometric models. Credit card fees -- Econometric models. Consumer behavior -- Econometric models. Paiement -- Modèles économétriques. Cartes de crédit -- Frais -- Modèles économétriques. Consommateurs -- Comportement -- Modèles économétriques. |
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