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This paper provides a new theory for two-sided payment card markets. Adopting payment cards requires consumers and … among heterogeneous consumers and merchants, our theory derives the equilibrium card adoption and usage pattern consistent …
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U.S. consumers' demand for cash is estimated with new panel micro data for 2008-2010 using econometric methodology similar to Mulligan and Sala-i-Martin (2000); Attanasio, Guiso, and Jappelli (2002); and Lippi and Secchi (2009). We extend the Baumol-Tobin model to allow for credit card payments...
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