Theory of Credit Card Networks: A Survey of the Literature

Chakravorti, Sujit

doi:10.2139/ssrn.419944

Abstract

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Theory of Credit Card Networks: A Survey of the Literature

Sujit Chakravorti

The Clearing House

Review of Network Economics, Vol. 2, No. 2, June 2003

Abstract:
Credit cards provide benefits to consumers and merchants not provided by other payment instruments as evidenced by their explosive growth in the number and value of transactions over the last 20 years. Recently, credit card networks have come under scrutiny from regulators and antitrust authorities around the world. Focusing on interrelated bilateral transactions, several theoretical models have been constructed to study the implications of several business practices of credit card networks. Suggestions for future research are also discussed.

Number of Pages in PDF File: 19

Keywords: payment networks, credit cards, antitrust, network effects, interchange fees, no-surcharge rules

JEL Classification: D62, G28, L51

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Date posted: July 27, 2003

Suggested Citation

Chakravorti, Sujit, Theory of Credit Card Networks: A Survey of the Literature. Review of Network Economics, Vol. 2, No. 2, June 2003. Available at SSRN: http://ssrn.com/abstract=419944 or http://dx.doi.org/10.2139/ssrn.419944

Contact Information

Sujit Chakravorti (Contact Author)

The Clearing House ( email )

450 West 56th Street
New York, NY 10001
United States
212 613 0143 (Phone)