nep-ict New Economics Papers
on Information and Communication Technologies
Issue of 2014‒12‒08
eight papers chosen by
Walter Frisch
Universität Wien

  1. Impact of broadband speed on economic outputs: An empirical study of OECD countries By Kongaut, Chatchai; Bohlin, Erik
  2. Disassembly and reassembly on digital technology and creative industries By Vincent Mangematin; Jonathan Sapsed; Elke Schüßler
  3. European Innovation Dynamics and US Economic Impact: Theory and Empirical Analysis By Welfens, Paul J. J.; Irawan, Tony
  4. Consumer Price Search and Platform Design in Internet Commerce By Michael Dinerstein; Liran Einav; Jonathan Levin; Neel Sundaresan
  5. Are Information Disclosure Mandates Effective? Evidence from the Credit Card Market By Alan Elizondo; Enrique Seira
  6. Estimating the potential increase in consumer welfare from the introduction of 'Super Wi-Fi' service By Hong, Areum; Nam, Changi; Kim, Seongcheol
  7. Proposed system for augmented perception services using IoT technologies By Kim, Sunjin; Park, Donghwan; Bang, Hyochan; Kim, Marie
  8. Wireless Access Policy for Electronic Communications Services (WAPECS): Collision between theory and practice By El-Moghazi, Mohamed; Whalley, Jason; Irvine, James

  1. By: Kongaut, Chatchai; Bohlin, Erik
    Abstract: Due to the development of new innovations and technologies, broadband services currently require more transmission capacity to work properly and efficiently with new content. Higher quality video content and more complex applications on internet services also require faster broadband speed. Hence, policy-makers have implemented broadband policy to ensure that countries will have high speed broadband infrastructure for both wired and wireless services. Even though the importance of broadband speed has been recognised almost everywhere, there are only a few studies investigating this issue in the academic field, especially in empirical research. In the past, a number of studies have analysed the impacts of broadband penetration on economic growth and indicated that higher broadband penetration leads to greater economic impacts. Nevertheless, other characteristics of broadband services such as different speeds of transmission, type of connection, quality of service and service providers are becoming more important to determine the economic impacts, as they vary across countries. Hence, broadband penetration on its own may not be a good measurement of the impacts of broadband services on the economy. This study therefore aims to add knowledge from a speed transmission perspective and enrich the empirical evidence in broadband speed studies, which has so far been limited. Similarly to the studies on the effects of telecommunication services (computer, mobile telephony and broadband penetration) on economic outputs, the estimated regressions of the model between broadband speed and economic outputs such as GDP are likely to suffer from endogeneity bias. To reduce the endogeneity problem, this study compares different models to provide the robustness of the relationship between broadband speed and economic outputs. This study also further analyses and compares the relationship between high and low income OECD countries. This paper applies the data from 2008 to 2012, mainly from the OECD and World Bank statistics, for most of the variables and the Ookla website for the broadband speed variable. The outcomes of this study are that broadband speed contributes positively to economic outputs such as GDP. The effects of broadband speed are also greater in countries with lower income. The policy recommendation is therefore that countries should focus on and encourage high speed broadband infrastructure and adoption in their national broadband plans and policies, which will ultimately lead to economic development.
    Date: 2014
  2. By: Vincent Mangematin (MTS - Management Technologique et Strategique - Grenoble École de Management (GEM)); Jonathan Sapsed (University of Brighton - University of Brighton); Elke Schüßler (Freie University Berlin - Freie University Berlin)
    Abstract: This paper analyses the dynamics of disassembly and reassembly unfolding in selected creative industries through the advent of digital technology. It argues that a full understanding of the much-observed organizational or sectoral lock-in effects on the one hand, and the possibilities for transformation and innovation on the other is only gained by analyzing jointly how institutional logics, business models and creative processes are affected by digital technology and how they interrelate in producing stability or change. These three dimensions provide a framework for reviewing the findings of the papers comprised in the Special Issue and for integrating their insights towards a research agenda. This introduction starts with a reflection on creative industries classification systems and related possibilities for generalization and discusses how digital technology acts as a driver for disassembly and reassembly. It concludes by highlighting three avenues for further research.
    Keywords: Digital technology; creative industries; innovation; business models; institutional change; institutional logics; creative processes
    Date: 2014
  3. By: Welfens, Paul J. J. (University of Wuppertal); Irawan, Tony (University of Wuppertal)
    Abstract: The role of product innovations is growing in the world economy, and the EU and the US are key players here. The analysis presented herein explains product innovations in the EU25 for the period 2006-2012, namely through lagged R&D (relative to GDP), cumulated FDI inflows (relative to the host country capital stock) and cumulated FDI inflows (relative to the host country capital stock), joint internet intensity, broadband intensity and potential competition. For the first time we can offer a broad analysis of product innovation dynamics in Europe which should be the basis for not only better supply-side policy in EU countries and growth policy, respectively, but it also suggests a strong role for international digital communication in relation to product innovation dynamics. Moreover, the approach provides new important arguments in favor of the TTIP negotiations between the US and the EU and it suggests a broader analytical link between trade, FDI, innovation, employment and output growth.
    Keywords: innovation, foreign direct investment, TTIP negotiation
    JEL: F21 F15 O31
    Date: 2014–09
  4. By: Michael Dinerstein; Liran Einav; Jonathan Levin; Neel Sundaresan
    Abstract: Search frictions can explain why the "law of one price" fails in retail markets and why even firms selling commodity products have pricing power. In online commerce, physical search costs are low, yet price dispersion is common. We use browsing data from eBay to estimate a model of consumer search and price competition when retailers offer homogeneous goods. We find that retail margins are on the order of 10%, and use the model to analyze the design of search rankings. Our model explains most of the effects of a major re-design of eBay's product search, and allows us to identify conditions where narrowing consumer choice sets can be pro-competitive. Finally, we examine a subsequent A/B experiment run by eBay that illustrates the greater difficulties in designing search algorithms for differentiated products, where price is only one of the relevant product attributes.
    JEL: D12 D22 D83 L13 L86
    Date: 2014–08
  5. By: Alan Elizondo (Banco de México); Enrique Seira (Centro de Investigación Económica (CIE), Instituto Tecnológico Autónomo de México (ITAM))
    Abstract: Consumer protection in financial markets in the form of information disclosure is high on governments agendas, espite the fact that the empirical evidence on its effectiveness is scarce. To measure the impact of Truth-in-Lending-Act-type disclosures on default and indebtedness, as well as of debiasing warning messages and social comparison information, we implement a randomized control trial in the credit card market for a large population of indebted cardholders. We find that providing salient interest rate disclosures has no effect, while social comparisons and debiasing messages have only a odest effect. Other types of disclosures discussed in the paper could have larger effects
    Keywords: Credit cards, information disclosure, truth in lending, Mexico.
    JEL: D12 D14 D83 G02 G21 G28
    Date: 2014
  6. By: Hong, Areum; Nam, Changi; Kim, Seongcheol
    Abstract: With the increasing use of smart devices recently, mobile traffic has been increasing rapidly, which in turn results in greater demand for the frequency. Many countries have attempted to use the vacant frequencies known as TV White Space (TVWS) in an effort to solve the frequency problem. Super Wi-Fi service, a wireless Internet service based on TVWS, is one of the ways TVWS is being utilized. This paper applies conjoint analysis to evaluate consumers’ willingness to pay for each of the attributes of Super Wi-Fi service and estimates how much consumer welfare could be improve by the introduction of Super Wi-Fi service. The attributes of Super Wi-Fi service are coverage, a reduction in communication expenses when using mobile data, the ability to use multiple-screens, and a wide range of Wi-Fi service providers. The results based on user surveys indicated that the marginal willingness to pay (MWTP) amount per month for Super Wi-Fi service is KRW 4,717 (USD 4.6). Moreover, the MWTP amount in non-urban areas for this service is greater than that in urban areas, implying that the introduction of Super Wi-Fi service is expected to increase consumer welfare, especially in non-urban areas.
    Date: 2014
  7. By: Kim, Sunjin; Park, Donghwan; Bang, Hyochan; Kim, Marie
    Abstract: There is no doubt that the phrase "Internet of Things (IoT)" points out a vision of the machines (or things) of the future where 'Things are learning to perceive', although there are a number of slightly varying definitions about the IoT. Based on this concept of IoT, this paper proposes a system for augmented perception services to correspond to disasters where the main purpose of the system is to provide context information which is needed to respond to the scene of the disaster by collecting, creating, converting and sharing artificial sensory information at high speed for corresponding to disasters in the extreme or poor environment. For this, requirements and main functions for the services are identified, and the concept and architecture of the system are showed including a process flow on a method for the services. Finally, expected effects of using the proposed system are presented
    Date: 2014
  8. By: El-Moghazi, Mohamed; Whalley, Jason; Irvine, James
    Abstract: Fifty five years ago, Coase suggested in his seminal article 'The Federal Communications Commission' that spectrum assignments should be treated in a similar way to property rights where market forces allocate these flexible tradable rights to users with the highest valuations for it. While Coase's idea was appealing and gathered huge momentum in academia scene, the practice did not show much success. One of the first practical implementations was initiated in Europe in 2005 under the name 'Wireless Access Policy for Electronic Communication Services (WAPECS)'. WAPECS aimed at providing more flexibility in the European spectrum management framework by allowing using the spectrum on a technology and service neutral basis. At the international level, the European Conference of Postal and Telecommunications Administrations (CEPT) have been keen to introduce more flexibility at the international service allocation framework via different measures. The paper shows also that the international Radio Regulations (RR) can accommodate the WAPECS concept to a certain extent. Finally, the paper explains that the opposition from the other countries to the European attempts to introduce flexibility to the international service allocation framework is due to the potential implications at the national level.
    Date: 2014

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