Payment networks in a search model of money

Antoine Martin, Michael Orlando () and David Skeie

Review of Economic Dynamics, 2008, vol. 11, issue 1, 104-132

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 pay a cost to have access to a central data base which keeps track of payments made and received. Incentives must be provided to agents to access the central data base and to produce when they have access to this arrangement. We also study policies that can loosen these incentive constraints. In particular, we show that a `no-surcharge' rule has good incentive properties. Finally, we compare our model with the model of Cavalcanti and Wallace (1999 a and b). (Copyright: Elsevier)

Keywords: Payment networks; Money; Search (search for similar items in EconPapers)
JEL-codes: E59 G29 L14 (search for similar items in EconPapers)
Date: 2008
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

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Working Paper: Payment networks in a search model of money (2006)
Working Paper: Payments network in a search model of money (2006)
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DOI: 10.1016/j.red.2007.04.001

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