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This chapter presents how card markets work. It lays out the puzzles encountered by the architects of credit card markets and explains why they pose challenges to standard understandings of market economics. In line with the argument that credit cards combine the features of two products, payment cards and consumer loans, here the focus is on two payment puzzles: two-sided markets and standardization. It is argued that these puzzles are such that they cannot be effectively solved by a self-regulating competitive market driven by the forces of supply and demand in the pursuit of ever-increasing profits. Instead, the solutions to these puzzles require some sort of nonmarket intervention. The chapter concludes with a short account of how each of the two puzzles was solved in the American payment card market, as well as gives a brief preview of solutions used in the postcommunist countries.

This chapter presents the core analysis of competition in the banking sector based on the industrial organization (IO) approach. It examines both theoretical and empirical aspects as well as at the special problems in analyzing the sector. This includes studying pricing, product differentiation, frictions, network externalities and two-sided markets, market structure, and mergers. The validity of the Structure–Conduct–Performance paradigm for banking is tested and the contributions of the new empirical IO is explained. The effects of asymmetric information and deregulation are also discussed. The chapter concludes with an assessment of behavioral biases of consumers and investors, along with their effects on the strategies of banks, competition, and welfare.

We analyze the governance structure of online stolen data markets. As cybercriminal underground economies, stolen data markets are beyond the reach of state intervention, and yet they need form and regulation in order to function. While the illicit nature of the business brings risks to its participants, the online characteristics of these markets enable the participants to communicate easily, which is a crucial means of generating trust. We first identify stolen data markets in terms of their economic organization as two-sided markets, economic platforms with two distinct user groups that provide each other with network synergies. This characterization enables us to understand the role of the forum administrator as that of an intermediary, market creator, and market regulator. Then we clarify the role of communication networks and social structure in creating trust among buyers and sellers.

This chapter is devoted to economics of congestion and resultant outcomes. The increasing demand for bandwidth due to innovations by Content and Application Providers (CAPs) and the continuing scarcity of radio spectrum is putting pressure on End-user Connectivity Providers (ECPs) to adopt strategies for better management of their networks. Technologies, economics, and regulatory aspects of the resultant phenomenon of Net Neutrality are explained. Contrasting views of proponents and opponents of Net Neutrality are presented with accompanying rationale. Associated economics of two-sided markets in wireless broadband services are introduced to reinforce the concepts. Vertical integration across the value chain and the resultant economics are discussed. Net Neutrality in practice and associated regulatory and policy evolutions across the world are discussed.