The cashless man: do preferences matter?

Abstract

This paper deals with the relationship between individual preferences and the use of cash. Building on insights from economic and psychological literature, we present an agent-based model simulating consumers’ behaviour when choosing which mean of payment to use, according the value of the transaction. Assuming heterogeneous preferences for mean of payment, results show that the number of cash transactions and their value strongly depend on both the consumption and the preference structure. Results are validated with EU countries’ data, considering different national policies adopted on the cash usage.