Theory of Credit Card Networks: A Survey of the Literature

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

19 Pages Posted: 27 Jul 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.

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

JEL Classification: D62, G28, L51

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: https://ssrn.com/abstract=419944 or http://dx.doi.org/10.2139/ssrn.419944

Sujit Chakravorti (Contact Author)

Independent ( email )

No Address Available

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