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Further Thoughts on the Cashless Society: A Reply to Dr. Shampine

Author

Listed:
  • Garcia-Swartz Daniel

    (LECG Consulting)

  • Hahn Robert W.

    (AEI-Brookings Joint Center on Regulatory Studies)

  • Layne-Farrar Anne

    (LECG Consulting)

Abstract

We address Allan Shampine's critiques of our study on the costs and benefits of payment instruments, and review the current state of the literature. We argue that a consensus seems to be emerging in which: (a) different payment instruments appear to be socially efficient at different transaction sizes; (b) cash appears to be efficient for small payments; and (c) debit cards appear to overtake cash as the socially optimal instrument as the transaction size increases. Except for the fact that in our study credit appears to overtake debit at large transaction sizes, our 2006 findings are consistent with the consensus.

Suggested Citation

  • Garcia-Swartz Daniel & Hahn Robert W. & Layne-Farrar Anne, 2007. "Further Thoughts on the Cashless Society: A Reply to Dr. Shampine," Review of Network Economics, De Gruyter, vol. 6(4), pages 1-16, December.
    • Handle: RePEc:bpj:rneart:v:6:y:2007:i:4:n:5
    DOI: 10.2202/1446-9022.1132
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    Cited by:

    1. Takala, Kari & Virén, Matti, 2008. "Efficiency and costs of payments : some new evidence from Finland," Research Discussion Papers 11/2008, Bank of Finland.
    2. Rodolfo Maino & Marco Pani, 2024. "Could CBDCs Lead to Cash Extinction? Insights from a “Merchant-Customer” Model," International Advances in Economic Research, Springer;International Atlantic Economic Society, vol. 30(1), pages 21-45, February.
    3. Takala, Kari & Virén, Matti, 2008. "Efficiency and costs of payments: some new evidence from Finland," Bank of Finland Research Discussion Papers 11/2008, Bank of Finland.
    4. repec:zbw:bofrdp:2008_011 is not listed on IDEAS

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