ATM SURCHARGES: EFFECTS ON DEPLOYMENT AND WELFARE

Authors: CHIOVEANU, IOANA¹; FAULI-OLLER, RAMON²; SANDONIS, JOEL³; SANTAMARIA, JUANA⁴

Source: Journal of Industrial Economics, Volume 57, Number 3, September 2009 , pp. 613-635(23)

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Abstract:

This paper analyzes the effects of ATM surcharges on deployment and welfare, in a model where banks compete for ATM and banking services. Foreign fees, surcharges and the interchange fee are endogenously determined. We find situations in which surcharges are welfare enhancing. Under strategic fee setting, the increase in deployment caused by surcharging might compensate the surplus loss caused by the increase in prices.

Document Type: Research article

DOI: http://dx.doi.org/10.1111/j.1467-6451.2009.00385.x

Affiliations: 1: Department of Economics, University College London, Gower Street, London WC1E, 6BT, England. U.K., Email: i.chioveanu@ucl.ac.uk 2: Departamento de Fundamentos del Análisis Económico, Universidad de Alicante, Campus de San Vicente del Raspeig, Alicante, Spain., Email: fauli@merlin.fae.ua.es 3: Departamento de Fundamentos del Análisis Económico, Universidad de Alicante, Campus de San Vicente del Raspeig, Alicante, Spain., Email: sandonis@merlin.fae.ua.es 4: Frontier Economics Ltd, Larra 12, 28004 Madrid, Spain., Email: juana.santamaria@frontier-economics.com

Publication date: 2009-09-01