Interchange Fees: Efficient Pricing or Market Failure?

     

Schmalensee concluded that while the card schemes may not set the “socially optimal fee” there is no reason to believe that the fee they do set is that much different or that regulators have the necessary information to set the best fee.  Amelio  described the Commission’s antitrust case against MasterCard and the difficulties that interchange fees present under Article 101. Bolt explained how the complexities of the card business affected the analysis of interchange fees. Valletti used the example of mobile termination to explain how regulating one price in a two-sided market affected the other price through the “waterbed effect”.

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Andrea Amelio

 

Wilko Bolt

 

Tommaso Valletti

 

Richard Schmalensee


Richard (Dick) Schmalensee is a Principal of Global Economics Group, John C. Head III Dean, Emeritus, of the MIT Sloan School of Management, and Howard W. Johnson Professor of Management and Economics at MIT Read More

Dr. Andrea Amelio joined DG COMP’s Chief Economist Team in September 2007. He currently works on mergers, Article 81, Article 82 and State Aid cases in a range of industries including basic industries, financial services, transport and ICT. Read More

Wilko Bolt is a Senior Economist in the research department at De Nederlandsche Bank in Amsterdam. He received his PhD in economics from the Vrije Universiteit of Amsterdam. Read More

Tommaso Valletti has a magna cum laude degree in engineering from Turin and holds a MSc and a PhD in economics from the London School of Economics, where he also taught until 2001.Read More