What is it about?
We develop an agent-based model of the competition between payment cards by focusing on the interactions between consumers and merchants determining the subscription and usage of cards. We find that after a short period of time the market will be dominated by a small number of cards, even though there might not exist significant differences between cards and the market is competitive. In contrast to the existing literature we focus on the dynamics of market shares rather than equilibrium outcomes. Our results are consistent with observations from the market for payment cards.
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Why is it important?
We find that after a short period of time the market will be dominated by a small number of cards, even though there might not exist significant differences between cards and the market is competitive
Perspectives
Our results are consistent with observations from the market for payment cards.
Dr Biliana Alexandrova-Kabadjova
Banco de Mexico
Read the Original
This page is a summary of: An Agent-Based Model of Interactions in the Payment Card Market, Springer Science + Business Media,
DOI: 10.1007/978-3-540-77226-2_106.
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