Perfect surcharging and the tourist test interchange fee

Hans Zenger

Journal of Banking & Finance, 2011, vol. 35, issue 10, 2544-2546

Abstract: Two widely discussed pricing benchmarks in the literature on payment card markets are the "tourist test" interchange fee (Rochet and Tirole, forthcoming), 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)
Date: 2011
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Citations: View citations in EconPapers (12)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jbfina:v:35:y:2011:i:10:p:2544-2546

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