Microfoundations of Two-sided Markets: The Payment Card Example ∗
| Title: | Microfoundations of Two-sided Markets: The Payment Card Example ∗ |
|---|---|
| Authors: | James Mcandrews; Zhu Wang; Jel Classification L |
| Contributors: | The Pennsylvania State University CiteSeerX Archives |
| Source: | http://www.kansascityfed.org/publicat/psr/rwp/paymentdynamics.pdf. |
| Publication Year: | 2006 |
| Collection: | CiteSeerX |
| Subject Terms: | ∗ We thank Nathan Halmrast for valuable research assistance. The views expressed herein are |
| Description: | This paper provides a theory of two-sided market dynamics with arguably better microfoundations. These alternative microfoundations focus on observ-able heterogeneities of both sides of the market in a competitive framework. The theory is rich in empirical predictions and is less dependent on a particular form of imperfect competition than other approaches. Our findings in the pay-ment card example point to adoption costs and the distribution of consumer incomes and firm sizes as the key determinants of the shares of costs borne by each side. This result provides clear implications for industry dynamics and sheds light on the puzzle of asymmetric pricing. |
| Document Type: | text |
| File Description: | application/pdf |
| Language: | English |
| Relation: | http://citeseerx.ist.psu.edu/viewdoc/summary?doi=10.1.1.137.9215; http://www.kansascityfed.org/publicat/psr/rwp/paymentdynamics.pdf |
| Availability: | http://citeseerx.ist.psu.edu/viewdoc/summary?doi=10.1.1.137.9215; http://www.kansascityfed.org/publicat/psr/rwp/paymentdynamics.pdf |
| Rights: | Metadata may be used without restrictions as long as the oai identifier remains attached to it. |
| Accession Number: | edsbas.58FE9C77 |
| Database: | BASE |