Demand for Payment Services and Consumer Welfare: The Introduction of a Central Bank Digital Currency

Kim Huynh, Jozsef Molnar, Shcherbakov Oleksandr () and Yu Qinghui (Jerry) ()
Additional contact information
Shcherbakov Oleksandr: Currency Department, 6315 Bank of Canada , 234 Wellington Street, Ottawa, Ontario K1A 0G9, Canada
Yu Qinghui (Jerry): Currency Department, 6315 Bank of Canada , 234 Wellington Street, Ottawa, Ontario K1A 0G9, Canada

Review of Network Economics, 2024, vol. 23, issue 4, 199-230

Abstract: In this paper, we study how potential characteristics of the new payment instrument may affect consumer adoption and usage decisions at the point of sale. We do this by developing and estimating a structural model of payment choice, which accounts for rich heterogeneity in consumer preferences and distinguishes between adoption and usage decisions. In the model, consumers face uncertainty about acceptance decisions by merchants, who represent the opposite side of the market. We use parameter estimates to simulate introduction of a new payment instrument and to evaluate the effect of this introduction on the welfare of various demographic groups of consumers.

Keywords: multisided markets; digital currencies and fintech; financial services (search for similar items in EconPapers)
JEL-codes: C51 E42 L14 L52 (search for similar items in EconPapers)
Date: 2024
References: Add references at CitEc
Citations:

Downloads: (external link)
https://doi.org/10.1515/rne-2024-0056 (text/html)
For access to full text, subscription to the journal or payment for the individual article is required.

Related works:
Working Paper: Demand for Payment Services and Consumer Welfare: The Introduction of a Central Bank Digital Currency (2020)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bpj:rneart:v:23:y:2024:i:4:p:199-230:n:1002

Ordering information: This journal article can be ordered from
https://www.degruyter.com/journal/key/rne/html

DOI: 10.1515/rne-2024-0056

Access Statistics for this article

Review of Network Economics is currently edited by Lukasz Grzybowski

More articles in Review of Network Economics from De Gruyter
Bibliographic data for series maintained by Peter Golla ().