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Accommodating a New Tenant in the House of Cards: Introducing Competition Into a Network Industry

47 Pages Posted: 23 Jan 2004  

Amitai Aviram

University of Illinois College of Law

Date Written: February 2004

Abstract

The network facilities of many network industries are natural monopolies. It is well accepted, however, that certain network industries may efficiently accommodate competition between several firms over the utilization of the network facilities. Historically, many networks had been created by a single firm, and introducing competition into such networks often requires compelled accommodation of a new competitor into a network dominated by an incumbent.

This paper studies one case of compelled accommodation in a networks industry - the introduction of a second processor of Visa-brand credit cards in Israel. The paper does not attempt to offer a theory on this matter, but rather provides a detailed case study that should assist in establishing an empirical basis to theories on government's role in introducing competition into a network industry.

Keywords: Credit cards

JEL Classification: L89

Suggested Citation

Aviram, Amitai, Accommodating a New Tenant in the House of Cards: Introducing Competition Into a Network Industry (February 2004). FSU College of Law, Public Law Research Paper No. 98; George Mason Law & Economics Research Paper No. 04-01. Available at SSRN: https://ssrn.com/abstract=488344 or http://dx.doi.org/10.2139/ssrn.488344

Amitai Aviram (Contact Author)

University of Illinois College of Law ( email )

504 E. Pennsylvania Avenue
Champaign, IL 61820
United States

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