Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/97134
Authors: 
Camera, Gabriele
Casari, Marco
Bortolotti, Stefania
Year of Publication: 
2014
Series/Report no.: 
SAFE Working Paper Series 49
Abstract: 
We study the behavioral underpinnings of adopting cash versus electronic payments in retail transactions. A novel theoretical and experimental framework is developed to primarily assess the impact of sellers' service fees and buyers' rewards from using electronic payments. Buyers and sellers face a coordination problem, independently choosing a payment method before trading. In the experiment, sellers readily adopt electronic payments but buyers do not. Eliminating service fees or introducing rewards significantly boosts the adoption of electronic payments. Hence, buyers' incentives play a pivotal role in the diffusion of electronic payments but monetary incentives cannot fully explain their adoption choices. Findings from this experiment complement empirical findings based on surveys and field data.
Subjects: 
money
coordination
pricing
transactions
JEL: 
E1
E4
E5
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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