The design with intent method: A design tool for influencing user behaviour

The official published version can be found at the link below.Using product and system design to influence user behaviour offers potential for improving performance and reducing user error, yet little guidance is available at the concept generation stage for design teams briefed with influencing user behaviour. This article presents the Design with Intent Method, an innovation tool for designers working in this area, illustrated via application to an everyday human–technology interaction problem: reducing the likelihood of a customer leaving his or her card in an automatic teller machine. The example application results in a range of feasible design concepts which are comparable to existing developments in ATM design, demonstrating that the method has potential for development and application as part of a user-centred design process

ATM and cashpoint art: what’s at stake in designing against crime

When Hammersmith Police approached the Design Against Crime Research Centre (DACRC) at the University of Arts London, for help in dealing with theft and fraud linked to users of ATM’s, the DACRC team looked sideways, beyond traditional ‘security solutions’, collaborating with artist Steve Russell, to help find some new and creative ways of influencing behaviour around “cashpoints”. Hammersmith Police contacted DACRC because Prof. Lorraine Gamman, who directs the Centre, has written about design against pickpocketing and bag theft, and works closely with businesses in her role as advisor to the Home Office’s “Design Technology Alliance Against Crime

The demand for money, financial innovation, and the welfare cost of inflation: an analysis with household data

We use microeconomic data on households to estimate the parameters of the demand for currency derived from a generalized Baumol-Tobin model. Our data set contains information on average currency, deposits, and other interest-bearing assets; the number of trips to the bank; the size of withdrawals; and ownership and use of ATM cards. We model the demand for currency accounting for adoption of new transaction technologies and the decision to hold interest-bearing assets. The interest rate and expenditure flow elasticities of the demand for currency are close to the theoretical values implied by standard inventory models. However, we find significant differences between individuals with an ATM card and those without. The estimates of the demand for currency allow us to calculate a measure of the welfare cost of inflation analogous to Bailey's triangle, but based on a rigorous microeconometric framework. The welfare cost of inflation varies considerably within the population but never turns out to be very large (about 0.1 percent of consumption or less). Our results are robust to various changes in the econometric specification. In addition to the main results based on the average stock of currency, the model receives further support from the analysis of the number of trips to and average withdrawals from the bank and the ATM

Modelling rational user behaviour as games between an angel and a demon

Formal models of rational user behavior are essential for user-centered reasoning about interactive systems. At an abstract level, planned behavior and reactive behavior are two important aspects of the rational behavior of users for which existing cognitive modeling approaches are too detailed. In this paper, we propose a novel treatment of these aspects within our formal framework of cognitively plausible behavior. We develop an abstract, formal model of rational behavior as a game between two opponents. Intuitively, an Angel abstractly represents the planning aspects, whereas a Demon represents the reactive aspects of user behavior. The formalization is carried out within the MOCHA framework and is illustrated by simple examples of interactive tasks

The demand for money, financial innovation, and the welfare cost of inflation: an analysis with household data

We use microeconomic data on households to estimate the parameters of the demand for currency derived from a generalized Baumol-Tobin model. Our data set contains information on average currency, deposits, and other interest-bearing assets; the number of trips to the bank; the size of withdrawals; and ownership and use of ATM cards. We model the demand for currency accounting for adoption of new transaction technologies and the decision to hold interest-bearing assets. The interest rate and expenditure flow elasticities of the demand for currency are close to the theoretical values implied by standard inventory models. However, we find significant differences between individuals with an ATM card and those without. The estimates of the demand for currency allow us to calculate a measure of the welfare cost of inflation analogous to Bailey's triangle, but based on a rigorous microeconometric framework. The welfare cost of inflation varies considerably within the population but never turns out to be very large (about 0.1 percent of consumption or less). Our results are robust to various changes in the econometric specification. In addition to the main results based on the average stock of currency, the model receives further support from the analysis of the number of trips to and average withdrawals from the bank and the ATM

Financial Innovation and the Transactions Demand for Cash

We document cash management patterns for households that are at odds with the predictions of deterministic inventory models that abstract from precautionary motives. We extend the Baumol-Tobin cash inventory model to a dynamic environment that allows for the possibility of withdrawing cash at random times at a low cost. This modification introduces a precautionary motive for holding cash and naturally captures developments in withdrawal technology, such as the increasing diffusion of bank branches and ATM terminals. We characterize the solution of the model and show that qualitatively it is able to reproduce the empirical patterns. Estimating the structural parameters we show that the model quantitatively accounts for key features of the data. The estimates are used to quantify the expenditure and interest rate elasticity of money demand, the impact of financial innovation on money demand, the welfare cost of inflation, the gains of disinflation and the benefit of ATM ownership.

The effect of transaction pricing on the adoption of electronic payments: a cross-country comparison

Pricing should speed up the substitution of low cost electronic payments for expensive paper-based transactions and cash. But by how much? Norway has explicitly priced individual payment transactions and rapidly shifted to electronic payments while the Netherlands has experienced the same shift without direct pricing. Controlling for differences between countries, the authors estimate the incremental effect of pricing on the shift to electronic payments. If users strongly value the improved convenience or security of electronic payments, pricing—viewed negatively by most consumers—may not be necessary to ensure rapid adoption of electronic payments. ; Also issued as Payment Cards Center Discussion Paper No. 05-18Electronic funds transfers ; Prices

The Demand for Currency at Low Interest Rates

currency, search theory, inflation

Technological change and the demand for currency: An analysis with household data

Advances in transaction technology allow agents to economize on the cost of cash management. We argue that accounting for the impact of new transaction technologies on currency holding behaviour is important to obtain theoretically consistent estimates of the demand for money. We modify a standard inventory model to study the effect of withdrawal technology on the demand for currency. An empirical specification for households’ demand schedule is suggested, in which both the level of currency holdings and the interest rate elasticity of demand depend on the withdrawal technology available to agents (e.g. ATM card ownership or a high/low density of bank branches, ATMs). The theoretical implications are tested using a unique panel of Italian household data (on currency holdings, deposit interest rates, consumption, development of banking services, etc.) for the period 1989-2004.money demand, inventory models, technological change