Your Network or Mine? The Economics of Routing Rules (2004)

Content Provider	CiteSeerX
Author	Hermalin, Benjamin E. Katz, Michael L.
Abstract	In many markets, including payment cards, telecommunications, and on-line auc-tions, service providers operate networks that support customer transactions with each other. When the two sides of a transaction belong to more than one network in common, the question of which network will carry the transaction arises. We show that the answer depends on a combination of who has the formal authority to choose and the parties ’ network subscription decisions. Our central finding is that granting formal authority to one side of the market can increase the extent to which transactions run over the network preferred by the other side of the market. We also characterize competing networks ’ equilibrium choices of routing
File Format	PDF
Journal	Forthcoming, Rand Journal of Economics
Language	English
Publisher Date	2004-01-01
Access Restriction	Open
Subject Keyword	Routing Rule Formal Authority Many Market Customer Transaction Transaction Belong On-line Auc-tions Central Finding Service Provider Network Equilibrium Choice Party Network Subscription Decision Payment Card
Content Type	Text
Resource Type	Article