AN EMPIRICAL ANALYSIS OF PAYMENT CARD USAGE -super-*
Marc Rysman ()
Journal of Industrial Economics, 2007, vol. 55, issue 1, 1-36
I exploit a unique data set on the payment card industry to study issues associated with network effects and two-sided markets. I show that consumers concentrate their spending on a single payment network (single-homing), although many maintain unused cards that allow the ability to use multiple networks (multi-homing). Further, I establish a regional correlation between consumer usage and merchant acceptance within the four major networks (Visa, Mastercard, American Express and Discover). This correlation is suggestive of the existence of a positive feedback loop between consumer usage and merchant acceptance. Copyright 2007 Blackwell Publishing Ltd..
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