The Economics of Credit Cards

Jun 08, 2010
B338 Rayburn House Office Building

Event Video

Credit cards and other electronic payment vehicles are a large and increasingly important part of how we do business. Credit cards allow consumers all over the world to have instantaneous access to credit to transact in both traditional in-person retail settings and over the Internet with businesses they will never see. In the U.S., we have become accustomed to paying for an increasing share of our purchases through electronic means.

But behind their convenience and speed lies an often misunderstood economics of consumer credit, two-sided markets, and network systems. Congressional action to regulate these markets must take into consideration the unique nature of this changing form of currency.

Professor Todd Zywicki and Professor Geoffrey Manne will provide an overview of the trends and data related to credit card usage, as well as explain the mechanisms which allow them to exist.

Todd J. Zywicki is George Mason University Foundation Professor of Law at George Mason University School of Law and senior scholar of the Mercatus Center at George Mason University. Since 2006 he has served as co-editor of the Supreme Court Economic Review. From 2003-2004, Professor Zywicki served as the director of the Office of Policy Planning at the Federal Trade Commission. He teaches in the area of bankruptcy, contracts, commercial law, business associations, law & economics, and public choice and the law.

Geoffrey Manne is the Executive Director of the International Center for Law & Economics (ICLE), a global think tank.  He also serves as Lecturer in Law for Lewis & Clark Law School. In this capacity he lends his expertise to various law school endeavors and teaches the school’s Law and Economics course.

Professor Manne was an Assistant Professor of Law at Lewis & Clark from 2003 to 2008. From 2006 to 2008, he directed a law and economics academic outreach program at Microsoft, and was Director, Global Public Policy at LECG, an economic consulting firm, until founding the ICLE at the end of 2009. Prior to joining the Lewis & Clark faculty he practiced law at Latham & Watkins, and before private practice, Manne was a Bigelow Fellow at the University of Chicago Law School, an Olin Fellow at the University of Virginia School of Law and a law clerk to Judge Morris S. Arnold of the U.S. Court of Appeals for the Eighth Circuit. His research has focused broadly on the economic implications of legal constraints on business organizations, particularly in the contexts of antitrust, nonprofit organizations and international law.