In this dissertation, I address the controversial policy under which a bank processes checks drawn on insufficient funds instead of bouncing them. A structural empirical model addresses customer's checking account balance decisions. Data on banks and on individual accountholders are used to estimate the likelihood of bouncing a check given the account balance, to estimate the level of check bouncing activity at banks with and without such a policy, to estimate customers' willingness to patronize such banks and to estimate banks' willingness to offer such a service. I empirically test four theories of technology adoption. The "rank" effect holds that firm heterogeneity explains adoption patterns. The "order" effect holds that first mover advantages are persistent. The "stock" effect holds that the largest benefits are derived when a firm is unique in adopting. The "epidemic" effect holds that news of a new technology is spread through contact with previous adopters. I discuss two related public policy questions. I find that 35% of overdraft checks are intentional, and there is a consumer surplus gain of {dollar}50 per accountholder annually from bounce protection policies. Further, I find evidence for the "order" and "rank" effects. My results are also consistent with the "stock" effect. I fail to find any evidence for the "epidemic" effect.
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