Centre for Computational Finance and Economic Agents Working Paper Series Wp017-08 Competition Is Bad for Consumers: Analysis of an Artificial Payment Card Market
نویسندگان
چکیده
This paper investigates the competition between payment card issuers in an artificial payment card market. In the market we model the interactions between consumers, merchants and competing card issuers and obtain the optimal pricing structure for card issuers. We allow card issuers to charge consumers and merchants with fixed fees, provide net benefits from card usage and engage in marketing activities. We establish that consumers benefit from a reduction of competing payment cards through lower fees and higher net benefits while merchants remain largely unaffected. The two-sided nature of the market leads to the result that more competitors do actually reduce competition for customers. Preprint submitted to Elsevier 20 July 2007
منابع مشابه
Evolutionary Learning of the Optimal Pricing Strategy in an Artificial Payment Card Market
This paper introduces an artificial payment card market in which we model the interactions between consumers, merchants and competing card issuers with the aim of determining the optimal pricing structure for card issuers. We allow card issuers to charge consumers and merchants with fixed fees, provide net benefits from card usage and engage in marketing activities. The demand by consumers and ...
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1 Centre for Computational Finance and Economic Agents (CCFEA), University of Essex, Wivenhoe Park, Colchester CO4 3SQ, Great Britain, E-Mail: [email protected] 2 University of Bath, School of Management, Claverton Down, Bath BA2 7AY, Great Britain, E-Mail: [email protected] 3 Department of Computer Science, University of Essex, Wivenhoe Park, Colchester CO4 3SQ, Great Britain, E-Mail: edward@e...
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∗General Directorate of Central Banking Operations, Bank of Mexico Avenida 5 de Mayo No.6, Colonia Centro, Delegacion Cuauhtemoc, 06059 Distrito Federal, Mexico City, Mexico E-mail: [email protected] ∗∗Department of Computer Science, University of Essex Wivenhoe Park, Colchester CO4 3SQ, Great Britain, E-mail: [email protected] ∗∗∗School of Management, University of Bath, Bath BA2 7A...
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