Perfect surcharging and the tourist test interchange fee

Hans Zenger

MPRA Paper from University Library of Munich, Germany

Abstract: Two widely discussed pricing benchmarks in the literature on payment cards markets are the "tourist test" interchange fee (Rochet and Tirole, 2010), which internalizes usage externalities in payment card markets, and "perfect surcharging" by merchants (Rochet and Tirole, 2002). This paper shows that these benchmarks are allocatively equivalent. Implications for the regulatory treatment of interchange fees and no-surcharge rules are discussed.

Keywords: Interchange fees; Two-sided markets; Surcharging; Tourist test (search for similar items in EconPapers)
JEL-codes: G21 L31 L42 (search for similar items in EconPapers)
Date: 2010-11-15
New Economics Papers: this item is included in nep-ban and nep-tur
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