Incentives, communication, and payment instruments

Alternative payment instruments are studied in an economy with private information, delayed communication, and limited commitment. Attention is restricted to checks and bank drafts, which differ in resource cost and communication characteristics. Checks are less costly but settlement delays create a limited commitment constraint. We find that drafts dominate at low wealths and checks at higher wealths. Applications to 19th century and modern payment systems are discussed.

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Year of publication:	2000
Authors:	Prescott, Edward S. ; Weinberg, John A.
Institutions:	Federal Reserve Bank of Richmond
Subject:	Checks \| Payment systems

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Extent:	text/html application/pdf
Series:	Working Paper.
Type of publication:	Book / Working Paper
Language:	English
Notes:	Number 00-11
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10004993910