*We thank Jeff Campbell, Ed Green, Tim Hannan, Beth Kiser, John Krainer and seminar participants at the 2004 NBER Summer Institute and the Federal Reserve Banks of Minneapolis and Chicago for helpful comments. Two anonymous referees and the Editor provided excellent constructive suggestions. Carrie Jankowski, Kaushik Murali and Anson Soderbery provided excellent research assistance. The authors gratefully acknowledge the financial support of the NET Institute.
HOW DOES INCOMPATIBILITY AFFECT PRICES?: EVIDENCE FROM ATM'S*
Article first published online: 27 AUG 2009
© 2009 The Authors. Journal compilation © 2009 Blackwell Publishing Ltd. and the Editorial Board of The Journal of Industrial Economics
The Journal of Industrial Economics
Special Issue: CRESSE SYMPOSIUM ON COMPETITION POLICY: PROCEDURES, INSTITUTIONS AND INTELLECTUAL PROPERTY RIGHTS Edited by Yannis Katsoulacos and David Ulph
Volume 57, Issue 3, pages 557–582, September 2009
How to Cite
KNITTEL, C. R. and STANGO, V. (2009), HOW DOES INCOMPATIBILITY AFFECT PRICES?: EVIDENCE FROM ATM'S. The Journal of Industrial Economics, 57: 557–582. doi: 10.1111/j.1467-6451.2009.00387.x
- Issue published online: 27 AUG 2009
- Article first published online: 27 AUG 2009
If consumers value ‘mix and match’ combinations of network complements, incompatibility between different sellers' components should affect prices. In ATM markets, a 1996 governance change exogenously generated such incompatibility, by allowing banks to impose surcharges when other banks' deposit customers use their ATM's. In our data, incompatibility makes the relationship between deposit account pricing and own ATM's more positive, and makes the relationship between deposit account pricing and competitors ATM's more negative. The level effect on prices is positive. The pattern of results is more pronounced in high population density markets, where customers may care more about ATM's.