IDEAS home Printed from https://ideas.repec.org/a/bpj/rneart/v23y2024i4p199-230n1002.html
   My bibliography  Save this article

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

Author

Listed:
  • Huynh Kim P.

    (Currency Department, 6315 Bank of Canada , 234 Wellington Street, Ottawa, Ontario K1A 0G9, Canada)

  • Molnar Jozsef

    (Currency Department, 6315 Bank of Canada , 234 Wellington Street, Ottawa, Ontario K1A 0G9, Canada)

  • 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)

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.

Suggested Citation

  • Huynh Kim P. & Molnar Jozsef & Shcherbakov Oleksandr & Yu Qinghui (Jerry), 2024. "Demand for Payment Services and Consumer Welfare: The Introduction of a Central Bank Digital Currency," Review of Network Economics, De Gruyter, vol. 23(4), pages 199-230.
    • Handle: RePEc:bpj:rneart:v:23:y:2024:i:4:p:199-230:n:1002
    DOI: 10.1515/rne-2024-0056
    as

    Download full text from publisher

    File URL: https://doi.org/10.1515/rne-2024-0056
    Download Restriction: For access to full text, subscription to the journal or payment for the individual article is required.
    File URL: https://libkey.io/10.1515/rne-2024-0056?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    More about this item

    Keywords

    multisided markets; digital currencies and fintech; financial services;
    All these keywords.

    JEL classification:

    • C51 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Construction and Estimation
    • E42 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Monetary Sytsems; Standards; Regimes; Government and the Monetary System
    • L14 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Transactional Relationships; Contracts and Reputation
    • L52 - Industrial Organization - - Regulation and Industrial Policy - - - Industrial Policy; Sectoral Planning Methods

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bpj:rneart:v:23:y:2024:i:4:p:199-230:n:1002. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Peter Golla (email available below). General contact details of provider: https://www.degruyter.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.