Publications et documents de travail
22/08/07
- revues scientifiques
    David Bounie and Nicolas Houy
Everything But the Powers of 2 and 3
In this paper, we generalize the power-of-2 and the power-of-3 monetary denomination systems (MDS) widely studied in the literature by considering the class of the power-of-α MDSs for all real α strictly between 1 and infinity. We show that for theoretical distributions of prices as well as for an actually observed distribution of prices, the power-of-2 and the power-of-3 MDSs are never the most efficient MDSs.
21/08/07
- revues scientifiques
    David Bounie and Nicolas Houy
What Europe Needs is an 80 Cents Coin
In this paper, we study and test the monetary denominational systems satisfying a given constraint of cognitive complexity. We show that introducing an 80 cents coin in the European denominational system would decrease the average number of coins needed in the economy by about 16%.
21/06/07
- revues scientifiques
    David Bounie and Nicolas Houy
A Note on the Aggregation of Payment Decisions
In this note, we study, test and discuss two original classes of payment aggregation rules based on transaction size models in order to replicate the demand for cash and deposits in the economy. First, we show that some of the aggregation rules call for special consideration since they better replicate the observed demand for cash and deposits. Second, we put forward a counterintuitive result which states that considering the difference between the use of payment card and check can significantly improve the prediction of the demand for cash.
11/06/07
- revues scientifiques
    David Bounie and Nicolas Houy
Modelling the Aggregate Payment Decisions in the Economy
The objective of this paper is to explain the use of cash, payment cards and checks in the economy. In so doing, we propose three models of payment decision and we test how well each of these models replicates the observed aggregate payments decisions. We show that the model based on cash holding performs better than the models based on transaction sizes. This result implies that introducing a third payment instrument crucially modifies the conclusions drawn from previous results given in the literature.
20/05/07
- revues scientifiques
    David Bounie, Abel Francois and Nicolas Houy
The Demand for Currency Versus Debitable Accounts: A Reconsideration
Payment choice models based on transaction sizes (TS models) induce strong predictions about the use of payment instruments. Especially, all equal-sized transactions should be paid with the same payment instrument. Then, for each individual, one should observe strict domains of transaction for every payment instruments. Using micro-level payment data from a representative sample of the French population, we show that TS models are bad at replicating individual and aggregate payment patterns. First, we show that the predictions of TS models are not empirically validated on an individual level. Second, we develop and test three models to explain the observed aggregate payment patterns. The first two models are aggregate versions of TS models and the third one is an alternative model based on a payment decision rule depending on cash holding (CH model). We find that the third model gives predictions between 2 and 6 times more precise than the first two models with notably less demanding information on individuals.
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