Bitte verwenden Sie diesen Link, um diese Publikation zu zitieren, oder auf sie als Internetquelle zu verweisen: https://hdl.handle.net/10419/222354 
Erscheinungsjahr: 
2020
Schriftenreihe/Nr.: 
Working Paper No. 345
Versionsangabe: 
Revised version, July 2020
Verlag: 
University of Zurich, Department of Economics, Zurich
Zusammenfassung: 
It is a common experience for present-day consumers making an international payment via credit or debit card to be invited to choose the currency in which they wish to have the transaction executed. While this choice, made feasible by a technology known as dynamic currency conversion (DCC), seems to foster competition, we show that the opposite is the case. In fact, the unique pure-strategy Nash equilibrium in a natural fee-setting game turns out to be highly asymmetric, entailing fees for the service provider that always exceed the monopoly level. Although losses in welfare may be substantial, a regulatory solution is unlikely to come about due to a global free-rider problem.
Schlagwörter: 
dynamic currency conversion
payment cards
ambiguity aversion
price competition
monopoly
free-rider problem
JEL: 
D21
G21
G28
G53
Persistent Identifier der Erstveröffentlichung: 
Dokumentart: 
Working Paper

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