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CInSt Research Seminar "Evaluating efficient multilateral interchange fees: evidence from end-user benefit"

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Dear colleagues,
You are cordially invited to attend the Center for Institutional Studies Research Seminar.
Evaluating efficient multilateral interchange fees: evidence from end-user benefit
Egor Krivosheya (Faculty of Economic Sciences, School of Finance, HSE)
Abstract
This article evaluates the efficiency of current MIF rates for Russian market as well as identifies the effects of their changes. In order to estimate the demand of end-users and end-users’ surpluses the study uses the adopted version of the Bedre-Defolie and Calvano (2013) model as well as the representative samples of 800 traditional (offline) Russian merchants, 1500 Russian individuals and 7 banks from top 20 that cover more than 80% of the Russian issuing and acquiring markets and the end-users’ benefits. Results confirm the efficiency of currently set MIF rates. Comparative statics analysis confirms that the changes in MIF rates never lead to Pareto improvement, while the total surplus changes are asymmetric across different market parts. The article also shows that once the realistic assumptions are introduced to the models (e.g., information asymmetry, imperfect pass-through of changes) the end-users’ welfare is distorted more severely as a result of the MIF rates changes. The first-best policy for Russian regulator and legislators is the use of alternative (non-tariff) stimulating measures for cashless economy in order to isolate the effect of changes to the intended groups.
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Date and time:  May 31, 2018; 6 PM
Place:  20 Myasnitskaya str.; room 120
Language: English
Free entrance.
If you don't have an HSE ID, please send your name and surname to lovakov@hse.ru before 13:00, May 31.