Skip Navigation


Oxford Economic Papers Advance Access originally published online on December 10, 2004
Oxford Economic Papers 2005 57(1):157-168; doi:10.1093/oep/gpi009
This Article
Right arrow Full Text
Right arrow Full Text (PDF)
Right arrow All Versions of this Article:
57/1/157    most recent
gpi009v1
Right arrow Alert me when this article is cited
Right arrow Alert me if a correction is posted
Services
Right arrow Email this article to a friend
Right arrow Similar articles in this journal
Right arrow Similar articles in ISI Web of Science
Right arrow Alert me to new issues of the journal
Right arrow Add to My Personal Archive
Right arrow Download to citation manager
Right arrowRequest Permissions
Google Scholar
Right arrow Articles by Masters, A.
Right arrow Articles by Rodríguez-Reyes, L. R.
Right arrow Search for Related Content
Related Collections
Right arrow D14 - Personal Finance
Right arrow E41 - Demand for Money
Social Bookmarking
Add to CiteULike   Add to Connotea   Add to Del.icio.us  
What's this?

© Oxford University Press 2004; All rights reserved

Endogenous credit-card acceptance in a model of precautionary demand for money

Adrian Masters* and Luis Raúl Rodríguez-Reyes{dagger}

*Department of Economics, State University of New York at Albany, 1400 Washington Avenue, Albany NY12222, USA; e-mail: amasters{at}albany.edu {dagger}University of Essex

A credit-card acceptance decision by retailers is embedded into a simple model of precautionary demand for money. The model gives a new explanation for how the use of credit-cards can differ so widely across countries. Retailers’ propensity to accept cards reduces the need for buyers to hold cash as the chance of a stock-out (of cash) is reduced. When retailers make their decision with respect to credit-card acceptance they do not take into account the effect that decision has on other sellers. This externality generates multiple equilibria over some portions of the parameter space.


Add to CiteULike CiteULike   Add to Connotea Connotea   Add to Del.icio.us Del.icio.us    What's this?




Disclaimer: Please note that abstracts for content published before 1996 were created through digital scanning and may therefore not exactly replicate the text of the original print issues. All efforts have been made to ensure accuracy, but the Publisher will not be held responsible for any remaining inaccuracies. If you require any further clarification, please contact our Customer Services Department.