The Design of E-Traveler's Check with Efficiency and Mutual Authentication

[[abstract]]Nowadays, traveling has become a popular leisure activity in our daily lives. Travelers can either use cash or credit cards to pay their bills. However, there is risk of cash being robbed or credit cards being copied. The traveler's check, which is a third choice, comes in to get travelers around such risks and to protect their rights. Nevertheless, traditional travelers' checks cannot keep imposters from forging and cashing them illegally. Hence, we propose a new type of check, called the e-traveler's check, to preserve the rights of holders of e-traveler's check and to prevent the check-issuing banks from being damaged

Experiments with the Traveler's Dilemma: Welfare, Strategic Choice and Implicit Collusion

This paper investigates behavior in the Traveler's Dilemma game and isolates deviations from textbook predictions caused by differences in welfare perceptions and strategic miscalculations. It presents the results of an experimental analysis based on a 2x2 design where the own and the other subject's bonus-penalty parameters are changed independently. We find that the change in own bonus-penalty alone entirely explains the effect on claims of a simultaneous change in one's own and the other's bonus-penalty. An increase in the other subject's bonus-penalty has a significant negative effect on claims when the own bonus-penalty is low, whereas it does not have a significant effect when the own bonus-penalty is high. We also find that expected claims are inconsistent with actual claims in the asymmetric treatments. Focusing on reported strategies, we document substantial heterogeneity and show that changes in choices across treatments are largely explained by risk aversion.

Experiments with the Traveler's Dilemma: Welfare, Strategic Choice and Implicit Collusion

This paper investigates behavior in the Traveler's Dilemma game and isolates deviations from textbook predictions caused by di®erences in welfare perceptions and strategic miscalculations. It presents the results of an experimental analysis based on a 2x2 design where the own and the other subject's bonus-penalty parameters are changed independently. We ¯nd that the change in own bonus-penalty alone entirely explains the e®ect on claims of a simultaneous change in one's own and the other's bonus-penalty. An increase in the other subject's bonus-penalty has a signi¯cant negative e®ect on claims when the own bonus-penalty is low, whereas it does not have a signi¯cant e®ect when the own bonus-penalty is high. We also ¯nd that expected claims are inconsistent with actual claims in the asymmetric treatments. Focus- ing on reported strategies, we document substantial heterogeneity and show that changes in choices across treatments are to a large extent explained by risk aversion.

Monetary Perspective On Underground Economic Activity In The United States

There are widespread reports of a growing underground, or unobserved, economy in the United States and in other countries. The unobserved economy seems to develop principally from efforts to evade taxes and government regulation. Although no single definition of such activity has been universally accepted, the term generally refers to activity – whether legal or illegal – generating income that either is underreported or not reported at all (see Chapter 1 in this volume). Some authors narrow the definition to cover income produced in legal activity that is not set down in the recorded national income statistics. Recent discussion of underground economic activity was stimulated by publication of two estimates, one by Gutmann (1977) and the other by Feige (1979), of the size of the underground economy in the United States; these estimates were derived from aggregate monetary statistics. In the ensuing years, numerous other estimates have been made of the underground economy in the United States and in other countries. The magnitude of some of these estimates has prompted congressional hearings and various government studies. In 1979, the Internal Revenue Service (IRS, 1979) estimated that, for 1976, individuals failed to report between $75 billion and$100 billion in income from legal sources and another $25 billion to$35 billion from three types of illegal activity – drugs, gambling, and prostitution. In a more recent study, the IRS estimated that unreported income from legal sources rose from $93.9 billion in 1973 to$249.7 billion in 1981 whereas unreported income from these same three illegal activities rose from $9.3 billion to$34 billion (IRS, 1983)

A beginner's guide to the U.S. payments system

A description of the U.S. payments system, outlining its evolution and examining some of the areas where improvements are needed.Payment systems