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Review of Network Economics

Editor-in-Chief: Grzybowski, Lukasz

Ed. by Briglauer, Wolfgang / Goetz, Georg / Pereira, Pedro

4 Issues per year

IMPACT FACTOR 2016: 0.500
5-year IMPACT FACTOR: 0.595

CiteScore 2016: 0.83

SCImago Journal Rank (SJR) 2015: 0.371
Source Normalized Impact per Paper (SNIP) 2015: 0.719

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Volume 5, Issue 1 (Mar 2006)


The No Surcharge Rule and Card User Rebates: Vertical Control by a Payment Network

Marius Schwartz / Daniel R. Vincent
Published Online: 2006-03-01 | DOI: https://doi.org/10.2202/1446-9022.1090

The No Surcharge Rule (NSR) prevents merchants from charging more to consumers who pay by card versus other means ("cash"). We consider a payment network facing local monopolist merchants that serve two consumer groups, card users and cash users. Unlike in prior work, transaction quantities are variable. The NSR raises network profit and harms cash users and merchants; overall welfare rises if and only if the ratio of cash to card users is sufficiently large. With the NSR, the network will grant rebates to card users whenever feasible. If rebates are not feasible, the NSR can harm even card users.

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Published Online: 2006-03-01

Citation Information: Review of Network Economics, ISSN (Online) 1446-9022, ISSN (Print) 2194-5993, DOI: https://doi.org/10.2202/1446-9022.1090.

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©2011 Walter de Gruyter GmbH & Co. KG, Berlin/Boston. Copyright Clearance Center

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