Government Intervention in Emerging Networked Technologies

We begin in Part I by describing and modeling how merchants and consumers decide whether to adopt and use a particular payment technology and then introduce the complications of network effects and multi-sided platforms. In Part II, we describe the various roles that the government may assume vis-à-vis any new technology, namely, legislator, fiduciary, or seller. Part III then discusses the tools that the government has available to influence public preferences. Part IV argues that despite the availability of these tools, the government generally should not act to promote particular technologies.