On nonexclusive membership in competing joint ventures

Jerry A. Hausman, Gregory K. Leonard, Jean Tirole

    Research output: Contribution to journalArticlepeer-review

    6 Scopus citations

    Abstract

    We evaluate the competitive and governance effects of "duality." Duality refers to the joint membership (e.g., by banks) in competing associations or joint ventures (e.g., Visa and MasterCard). We first show that the not-for-profit nature of the associations along with the usage-based fees they charge yield productive efficiency. We then analyze the impact of(i) membership exclusivity, when the associations remain not-for-profit, and (ii) the conversion into for-profit systems. We illustrate the results in the case of a double-differentiation model that is of independent interest. Finally, we discuss extensions to (i) endogenous system differentiation, and (ii) agency considerations.

    Original languageEnglish (US)
    Pages (from-to)43-62
    Number of pages20
    JournalRAND Journal of Economics
    Volume34
    Issue number1
    DOIs
    StatePublished - 2003

    ASJC Scopus subject areas

    • Economics and Econometrics

    Fingerprint Dive into the research topics of 'On nonexclusive membership in competing joint ventures'. Together they form a unique fingerprint.

    Cite this