Payments network in a search model of money

Antoine Martin, Michael Orlando () and David Skeie

No 580, 2006 Meeting Papers from Society for Economic Dynamics

Abstract: In a simple search model of money, we study a special kind of memory which gives rise to an arrangement resembling a payment network. Specifically, we assume that agents can choose to have access to a central data base which keeps track of payments made and received. We show that multiple equilibria can arise because of a network effect and we study policies that can help eliminate the equilibrium with low access. We also study policies that can loosen the participation constraint. Finally, we compare our model with the model of Cavalcanti and Wallace (1999 a and b)

Keywords: Payment networks; Money; Search (search for similar items in EconPapers)
JEL-codes: E59 G29 L14 (search for similar items in EconPapers)
Date: 2006
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Journal Article: Payment networks in a search model of money (2008)
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Persistent link: https://EconPapers.repec.org/RePEc:red:sed006:580

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