In this paper, we consider the costs and benefits of transactions privacy. In the environment we consider, privacy is the concealment of potentially useful information, but concealment also potentially bestows benefits. In some versions of the environment, the standard Coasian logic applies:...

Foreign exchange transactions are subject to a unique type of settlement risk. This risk ultimately stems from the difficulty of coordinating separate settlements in two different currencies. Settlement of foreign exchange transactions through the proposed CLS (quot;Continuous Linked...

Households and businesses in the U.S. prefer to use check payment over less costly, electronic means of payment. Earlier studies have focused on check float, i.e., the time lag between receipt and clearing, as a potential explanation for the continued popularity of checks. An underlying...

A controversial aspect of payment cards has been the no-surcharge rule. This rule, which is part of the contract between the card provider and a merchant, states that the merchant cannot charge a customer who pays by card more than a customer who pays by cash. In this paper we consider the...

The medieval banks of continental Europe facilitated trade by serving as payment intermediaries. Depositors commonly would pay one another by transferring bank balances with the aid of overdraft credit. We model this process in an environment of intermediate good exchange with incomplete...

Previous comparative analyses of gross and net settlement have focused on the credit risk of the central counterparty in net settlement arrangements, and on the incentives for participants to alter the risk of the portfolio under net settlement. By modeling the trading economy that generates the...

The quintessential crime of the information age is identity theft, the malicious use of personal identifying data. In this paper we model identity and its use in credit transactions. Various types of identity theft occur in equilibrium, including new account fraud, existing account fraud, and...

Foreign exchange transactions are subject to a unique type of settlement risk. This risk ultimately stems from the difficulty of coordinating separate settlements in two different currencies. Settlement of foreign exchange transactions through the proposed CLS (quot;Continuous Linked...

Households and businesses in the U.S. prefer to use checks over less costly means of payment. Earlier studies have focused on check quot;floatquot; as an explanation for the continued popularity of this seemingly inefficient technology. We construct a general equilibrium model of check payment,...

We examine the question of whether transactable forms of privately issued, demandable debt are better used as quot;banknotesquot; or quot;checks.quot; The distinction between the two is that a check must be redeemed by the issuing bank with each use, whereas a banknote can circulate. We find...