Tying in two-sided markets and the honor all cards rule

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Publication Details

Output type: Journal article

Author list: Rochet JC, Tirole J

Publisher: Elsevier

Publication year: 2008

Journal: International Journal of Industrial Organization (0167-7187)

Volume number: 26

Issue number: 6

Start page: 1333

End page: 1347

Number of pages: 15

ISSN: 0167-7187

eISSN: 1873-7986

Languages: English-Great Britain (EN-GB)

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Open access status: green

Full text URL: http://www.idei.fr/doc/by/tirole/2sided.pdf

Abstract

The paper then investigates a number of extensions of the benchmark model, including varying degrees of substitutability between the two cards; merchant heterogeneity; and platform differentiation. While the HAC rule may no longer raise social welfare under all values of the parameters, the basic and socially beneficial rebalancing effect unveiled in the benchmark model is robust. (C) 2008 Elsevier B.V. All rights reserved.

Keywords

Payment cards, Price rebalancing, Tie-ins, Two-sided markets

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