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Evans, David S., and Richard Schmalensee. Paying with Plastic: The Digital Revolution in Buying and Borrowing.
2nd ed. Cambridge, Mass.: MIT Press, 2005 (1999).
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Table of contents
Abstract
Reviews
Excerpt
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| Preface | xi |
| Acknowledgments | xiii |
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| 1. Plastic Cards | 1 |
| The Star | 7 |
| The Star Performance | 7 |
| The Main Characters | 10 |
| Other Members of the Cast | 11 |
| Supporting Roles | 13 |
| The Foreign Cast | 14 |
| The Thirteen Acts | 15 |
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| 2. From Sea Shells to Electrons | 19 |
| What is Money? | 19 |
| Money in America | 22 |
| Cash, Check, or Charge? | 25 |
| Debit or Credit? | 26 |
| The Role of Payment Cards in the U.S. Economy
| 30 |
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| 3. A Land of Local Banks, Awash in Paper Checks | 37 |
| Banking in America | 38 |
| Banks, Nonbanks, and Payment Cards | 47 |
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| 4. The Rise of Payment Cards | 61 |
| Diners Club and the Birth of the Payment Card
| 62 |
| The Infancy of the Card Associations | 65 |
| Early Policy Issues: Duality and Usury | 69 |
| The 1980s Spending and Debt Spree | 73 |
| The 1990s and the New Millennium | 75 |
| Risk, Innovation, and Investment | 77 |
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| 5. From Gourmets to the Masses | 85 |
| The Growth and Diffusion of Credit Cards in the
American Economy | 86 |
| Payment Cards and the Transactions Demand for
Money | 91 |
| Credit Cards and Liquidity Constraints | 94 |
| Credit Cards and Entrepreneurship | 100 |
| But Are Credit Cards Really a Good Deal? | 107 |
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| 6. Everywhere You Want to Be, Not Everywhere They Want to Be | 111 |
| Who Are the Players? | 112 |
| Honor All Cards | 119 |
| The Economics of Merchant Acceptance | 121 |
| More and More Merchants Take Payment Cards | 127 |
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| 7. Chickens, Eggs, and Other Economic Conundrums | 137 |
| Product Differentiation | 138 |
| Economics of Network Industries | 149 |
| Some Economics of Joint Ventures | 153 |
| Interdependent Pricing | 163 |
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| 8. System Wars | 169 |
| Who Are the Warriors? | 173 |
| The Weapons of War | 175 |
| The Rise and Decline of American Express Cards |
177 |
| The Bankcard Battles | 193 |
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| 9. Issuer Brawls | 207 |
| Who Are the Players? | 207 |
| Product Differentiation and Market Segmentation
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| Competitive Strategies | 216 |
| Market Structure | 224 |
| Market Performance | 235 |
| Consolidation in Banking and Cards | 244 |
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| 10. Puzzles and Paradoxes | 247 |
| High and Sticky Interest Rates | 248 |
| The Myth of Exorbitant Profit | 251 |
| AT&T, GM, and Credit Card Prices | 257 |
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| 11. The Antitrust Wars | 263 |
| Sleeping with the Enemy: Worthen | 267 |
| Good Fix: NaBanco | 275 |
| Someone’s Knocking at My Door: MountainWest
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| Leveling the Battlefield | 288 |
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| 12. Debit Takes Off (Finally) | 297 |
| Awkward Growth, Complexity, and Confusion | 297 |
| The Rise of ATMs | 302 |
| The Growth of PIN Pad Merchants | 306 |
| The Associations Finally Get It Right | 310 |
| Which Came First? | 315 |
| The Future of Debit Cards | 317 |
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| 13. And They Don’t Take Cash | 321 |
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| Sources and Notes | 327 |
| Selected Bibliography | 349 |
| Index | 361 |
