​“Strategic Complementarities in a Dynamic Model of Technology Adoption: P2P Digital Payments”

with Fernando Alvarez, David Argente, Francesco Lippi, & Diana Van Patten

American Economic Review, revise and resubmit

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We develop a dynamic model of technology adoption featuring strategic complementarities: the benefits of the technology increase with the number of adopters. We show that complementarities give rise to gradual adoption, multiple equilibria, multiple steady states, and suboptimal allocations. We study the planner’s problem and its implementation through adoption subsidies. We apply the theory to SINPE Móvil, a peer-to-peer payment app developed by the Central Bank of Costa Rica. Using transaction-level data and user-specific networks that we construct from administrative records, we causally estimate sizable complementarities. In our calibrated model, the optimal subsidy pushes the economy to universal adoption.

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Media Coverage: Yale Economic Growth Center

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“Payment-Chain Crisis”

with Saki Bigio & Diana Van Patten

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This paper introduces an endogenous network of payment chains into a business cycle model. Motivated by evidence of linked payments across firms in Costa Rica, we develop a framework where production orders form bilateral relations: some payments are executed immediately, while others—chained payments—are delayed until upstream payments are received. These chains capture real-world situations in which firms must wait to be paid before paying their own suppliers, leaving resources temporarily idle even when demand and capacity exist. In equilibrium, agents choose the amount of chained payments given interest rates and access to internal funds or credit lines. This choice determines the payment-chain network and aggregate total-factor productivity (TFP). The paper characterizes equilibrium dynamics and pecuniary externalities when agents internalize their own payment delays but not the delays imposed on others.

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“Drivers of Digital Payment Adoption: Lessons from Brazil, Costa Rica, and Mexico”

with David Argente, Paula Gonzalez Alvarez & Diana Van Patten

IMF Economic Review, revise and resubmit

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Digital payment platforms can displace cash and extend financial services to underserved populations, yet many adults worldwide remain unbanked. Leveraging granular microdata on individual transactions and user characteristics, we argue that broad cash substitution via peer-to-peer (P2P) platforms depends on a “rapid low incomegradient”—the speed at which adoption spreads from affluent early users to lower income groups. In three Latin American cases—Brazil’s Pix, Costa Rica’s Sinpe Móvil, and Mexico’s CoDi—we document that low adoption costs, strong network effects, coordinated supply-side integration, and early awareness efforts enabled Pix and Sinpe Móvil to reach nearly all income segments within five years, whereas CoDi remains characterized by low usage and predominantly high-income adopters.

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Media Coverage: Inside PayTech, La Nación

Journal Articles