Friday, February 3, 2012
Posted by D. Daniel Sokol
Oliver Budzinski (University of Southern Denmark in Esbjerg, Department of Environmental and Business Economics) and Jesper Fredborg Huric Larsen (University of Southern Denmark in Esbjerg, Centre for Rural Research, Department of Environmental and Business Economics) describe The Morgan Stanley/Visa Saga: How does Economics help Address Double-Sided Markets.
ABSTRACT: In Morgan Stanley/Visa, the Commission compelled the later company to open its payment system to the former. In economics, the case raised questions dealt with under the ‘double-sided market’ theory. Apparently, that theory was not used by the Commission—which, as a result, failed to benefit from its insights regarding firms dealing with distinct customer groups such as merchants and final consumers in the case at issue.