The faulty logic of "protecting" consumers from the absence of annual fees
Our friend and University of Chicago law professor, Omri Ben-Shahar, fresh off a run participating in our credit card interchange fee symposium, has penned a guest post following up on our ongoing discussion of annual fees: There is no annual fee for shopping at Wal-Mart, but there is an annual fee for shopping at Sam’s ... The faulty logic of "protecting" consumers from the absence of annual fees
The Fee Neutrality Claim
Will reduction in interchange fees help or hurt consumers? Two posts yesterday made the conjecture that a reduction in one category of fees would only increase other fees, and that the overall sum of fees will not change. This is the fee-neutrality claim. Todd Zywicki writes: The mathematics of the situation is inescapable: card issuers ... The Fee Neutrality Claim
The Myth of Consumer Protection Through Disclosure
I will focus my blog post on one of the proposals for reducing interchange fees: the requirement that the fees be disclosed to consumers. I am not sure how seriously this option is taken by the GAO report. Indeed, the report concedes that mandated disclosures in this context are not very likely to be effective, ... The Myth of Consumer Protection Through Disclosure
