IDEAS home Printed from https://ideas.repec.org/p/hal/journl/hal-02286878.html

Convenient Prices, Cash Payments and Price Rigidity

Author

Listed:
  • Yassine Bouhdaoui
  • David Bounie

    (ECOGE - Economie Gestion - I3 SES - Institut interdisciplinaire de l’innovation de Telecom Paris - Télécom Paris - IMT - Institut Mines-Télécom [Paris] - IP Paris - Institut Polytechnique de Paris - I3 - Institut interdisciplinaire de l’innovation - CNRS - Centre National de la Recherche Scientifique, SES - Département Sciences Economiques et Sociales - Télécom Paris - IMT - Institut Mines-Télécom [Paris] - IP Paris - Institut Polytechnique de Paris)

  • Abel François

Abstract

Recent works suggest that convenient prices that match monetary denominations exhibit above-average price rigidity and are set up by firms that have incentives to be paid in cash. The relationship between convenient prices and cash usage has however never been explicitly examined. This paper proposes a model that relates convenient prices to cash usage and exploits to test it a unique dataset in 2011 on cash payments and prices by a representative sample of French consumers. In line with the model, estimation results bring direct evidence that individuals' shares of cash payments increase with convenient prices. This finding confirms that price rigidity can be in part explained by the use of cash to pay convenient prices.
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • Yassine Bouhdaoui & David Bounie & Abel François, 2014. "Convenient Prices, Cash Payments and Price Rigidity," Post-Print hal-02286878, HAL.
    • Handle: RePEc:hal:journl:hal-02286878
    as

    Download full text from publisher

    To our knowledge, this item is not available for download. To find whether it is available, there are three options:
    1. Check below whether another version of this item is available online.
    2. Check on the provider's web page whether it is in fact available.
    3. Perform a
    for a similarly titled item that would be available.

    Other versions of this item:

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Carin Cruijsen & Frank Horst, 2019. "Cash or Card? Unravelling the Role of Socio-Psychological Factors," De Economist, Springer, vol. 167(2), pages 145-175, June.
    2. Chenavaz, Régis & Drouard, Joeffrey & Escobar, Octavio R. & Karoubi, Bruno, 2018. "Convenience pricing in online retailing: Evidence from Amazon.com," Economic Modelling, Elsevier, vol. 70(C), pages 127-139.
    3. Bouhdaoui, Yassine & Van Hove, Leo, 2017. "On the socially optimal density of coin and banknote series: Do production costs really matter?," Journal of Macroeconomics, Elsevier, vol. 52(C), pages 252-267.
    4. Doron Sayag & Avichai Snir & Daniel Levy, 2012. "0.001% and Counting: Revisiting the Price Rounding Tax," Post-Print hal-05349980, HAL.
    5. Snir, Avichai & Chen, Haipeng (Allan) & Levy, Daniel, 2022. "Zero-Ending Prices, Cognitive Convenience, and Price Rigidity," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 203, pages 519-542.
    6. Arango-Arango, Carlos A. & Bouhdaoui, Yassine & Bounie, David & Eschelbach, Martina & Hernandez, Lola, 2018. "Cash remains top-of-wallet! International evidence from payment diaries," Economic Modelling, Elsevier, vol. 69(C), pages 38-48.
    7. Bruno Karoubi & R駩s Chenavaz, 2015. "Prices for cash and cash for prices? Theory and evidence on convenient pricing," Applied Economics, Taylor & Francis Journals, vol. 47(38), pages 4102-4115, August.
    8. Prescott, Brian C. & Shy, Oz, 2023. "Cash payments and the penny policy debate," Journal of Economic Behavior & Organization, Elsevier, vol. 208(C), pages 80-94.
    9. Shy, Oz, 2020. "How currency denomination and the ATM affect the way we pay," Journal of Economics and Business, Elsevier, vol. 111(C).

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:hal:journl:hal-02286878. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: CCSD (email available below). General contact details of provider: https://hal.archives-ouvertes.fr/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.