Oligopoly Model of a Debit Card Network

Manchev, Peter (2006): Oligopoly Model of a Debit Card Network. Published in: Serdica Mathematical Journal , Vol. 33, (29 March 2007): pp. 35-46.

Abstract

The paper builds an oligopoly model of a debit card network. It examines the competition between debit card issuers. We show that there is an optimal pricing for the debit card network, which maximizes all issuer's revenues. The paper also shows that establishing a link between debit card networks averages the costs provided that there is no growth in the customer's usage of the networks, resulting from the link.

• Item Type: MPRA Paper
• Language: English
• Keywords: debit card; payment networks; switch fees; access pricing
• Subjects: G - Financial Economics > G2 - Financial Institutions and Services > G21 - Banks ; Depository Institutions ; Micro Finance Institutions ; Mortgages; L - Industrial Organization > L1 - Market Structure, Firm Strategy, and Market Performance > L13 - Oligopoly and Other Imperfect Markets

References

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