We analyze the complex nature of interactions among participants in "two-sided" payments system markets, examine empirical evidence on benefits, especially merchant benefits, and re-assess the role of interchange in balancing interests and allocating costs between merchants and consumers. We...

We consider a two-period model with two sellers and one buyer. Although we assume it is efficient for the buyer to purchase from both sellers in each period, we show that when the buyer's valuations are inter-temporally linked and at least one seller is financially constrained, exclusion can...