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

Markose, Sheri M and Loke, Yiing Jia (2000) Network effects on Cash-Card Substitution in Transactions and Low Interest Rate Regimes. UNSPECIFIED. UNSPECIFIED.

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Abstract

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 ("π"-super-"k") and the proportion ("ω") 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.

Item Type: Monograph (UNSPECIFIED)
Uncontrolled Keywords: HB;
Subjects: H Social Sciences > HB Economic Theory
Divisions: Faculty of Social Sciences > Economics, Department of
Depositing User: Jim Jamieson
Date Deposited: 16 Aug 2012 13:50
Last Modified: 17 Aug 2017 18:08
URI: http://repository.essex.ac.uk/id/eprint/3739

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