Associate Professor Xu Li of the Economics Department at our institution (corresponding author), alongside collaborators Associate Professors Chun-Yu Ho and Daiqiang Zhang of the Economics Department at the University of Albany, U.S., have published an academic paper in "The Review of Economics and Statistics," a leading economics journal, in November 2022. The paper, titled "Price Negotiation with Merchant Heterogeneity in the Payment Card Industry," appears in the 104(6) issue, on pages 1191-1205.

【Paper Abstract】

We examine price negotiation in the payment card industry by exploiting a unique merchant-, industry-, and city-level data set. Motivated by the substantial variation in acquirer fees and heterogeneous merchant card transactions, we use Nash bargaining to model the negotiation over the acquirer fee between an acquirer and a merchant. We find that the merchants secure a larger incremental surplus than the acquirer on average. Moreover, merchants might face upward pressure on acquirer fees as the card penetration rate rises over time, and policies that weaken the acquirer's bargaining power could relieve the upward fee pressure.

【About Xu Li】

Xu Li is an Associate Professor in the Department of Economics at the Antai College of Economics and Management, Shanghai Jiao Tong University. Her research and teaching interests include industrial organization theory, platform economics, payment market pricing, efficiency research on corporate digitization, and empirical research on industrial digital finance.