Title: Investment and usage of new technologies: evidence from a shared ATM network
Authors: Ferrari, Stijn *
Verboven, Frank * ×
Degryse, Hans * #
Issue Date: Jun-2010
Publisher: American Economic Association
Series Title: The American Economic Review vol:100 issue:3 pages:1046-1079
Abstract: The success of new technologies does not only depend on the firms' investment incentives, but often also on the consumers' usage decisions. This paper studies investment and usage in a shared ATM network. Inefficiencies may arise because banks coordinate their investment decisions and consumers may not make proper use of the cost-saving ATM network because of regulated retail fees. We develop an empirical model of ATM investment (or entry) and cash withdrawal demand. We find that banks substantially underinvested in the shared ATM network, in contrast with findings for the U.S., showing strategic overinvestment under partially incompatible networks. Furthermore, we find that consumer usage of the available ATM network is too low, because of the zero retail fees for cash withdrawals at branches. A direct promotion of investment can improve welfare, but the introduction of retail fees on cash withdrawals at branches would be more effective, even if this does not encourage investment per se.
ISSN: 0002-8282
Publication status: published
KU Leuven publication type: IT
Appears in Collections:Research Center of Econometrics, Leuven
Research Center of Monetary and Information Economics, Leuven
* (joint) first author
× corresponding author
# (joint) last author

Files in This Item:
File Description Status SizeFormat
Investment and usage of new technologies - Verboven.pdf Published 329KbAdobe PDFView/Open


All items in Lirias are protected by copyright, with all rights reserved.

© Web of science