Network Effects on Cash-Card Substitution in Transactions and Low Interest Rate Regimes  

Oleh:

Markose, Sheri M. ; Loke, Yiing Jia

Jenis: Article from Journal - ilmiah internasional
Dalam koleksi: The Economic Journal (EBSCO) vol. 113 no. 487 (2003), page 456-476.
Topik: networks; networks effect; substitution; transactions; low interest rate; regimes
Fulltext: 456.pdf (226.57KB)

Ketersediaan

Perpustakaan Pusat (Semanggi) Nomor Panggil: EE28.10 Non-tandon: 1 (dapat dipinjam: 0) Tandon: tidak ada

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Isi artikel

We develop a Nash game on the adoption of a new EFTPOS (Electronic Fund Transfer at Point of Sale) card payment media given cash is dispensed by a competitive ATM (Automated Teller Machine) network. Equilibrium conditions when cash and card use coexist entail a specific relationship between the card network coverage parameter (&pgr,k) and the proportion (&ohgr,) of cash financed expenditures. We derive a payments innovation technology constrained transactions demand for money which is highly interest rate sensitive in low interest rate regimes. Data on cash - card use in the UK (1990 –97) is used to calibrate the model.

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