Voluntary Collective Action

Blog, Regulation, David Seymour

The Canadian Federation for Independent Business believes that credit card companies are charging retailers are too much. They are launching a nationwide campaign to encourage consumers to use cash or debit instead.

In the same position as CFIB are in, many would complain that the credit card companies have too much “market power” and next thing you know they’d be reaching-for-a-regulator. Instead, CFIB is attempting to solve a collective action problem through persuasion.

The great advantage of this over a coercive approach (such as government regulating the margins that credit card companies can charge retailers) is that more minds are applied to the question of whether credit card companies really are overcharging because everyone gets to make their own choice. Good on CFIB.