Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/241151 
Year of Publication: 
2021
Series/Report no.: 
Staff Report No. 958
Publisher: 
Federal Reserve Bank of New York, New York, NY
Abstract: 
In a market where consumers choose between payment options and firms compete with products and prices, we show that payment data drives the formation of a market monopoly. A data-sharing policy can successfully restore and maintain a competitive market, but often at the expense of both efficiency and consumer welfare. The introduction of a low-cost anonymous means of electronic payment, or digital cash, preserves the market structure and improves consumers' welfare by enabling them to monetize their private information. We discuss the potential role of central banks in providing digital cash.
Subjects: 
customer data
privacy
market structure
digital cash
payments
JEL: 
E42
L11
L15
Document Type: 
Working Paper

Files in This Item:
File
Size
323.96 kB





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.