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on Information and Communication Technologies |
| By: | Francesco Decarolis; Maris Goldmanis; Antonio Penta |
| Abstract: | The transition of the advertising market from traditional media to the internet has induced a proliferation of marketing agencies specialized in bidding in the auctions that are used to sell ad space on the web. We analyze how collusive bidding can emerge from bid delegation to a common marketing agency and how this can undermine the revenues and allocative effciency of both the Generalized Second Price auction (GSP, used by Google and Microsoft-Bing and Yahoo!) and the of VCG mechanism (used by Facebook). We nd that, despite its well-known susceptibility to collusion, the VCG mechanism outperforms the GSP auction both in terms of revenues and effciency. |
| Keywords: | Collusion, digital marketing agencies, facebook, Google, GSP, internet auctions, online advertising, VCG |
| JEL: | C72 D44 L81 |
| Date: | 2019–04 |
| URL: | http://d.repec.org/n?u=RePEc:bge:wpaper:1088&r=all |
| By: | Auer, Raphael (Bank for International Settlements) |
| Abstract: | This paper discusses the economics of how Bitcoin achieves data immutability, and thus payment finality, via costly computations, i.e., “proof-of-work.” Further, it explores what the future might hold for cryptocurrencies modelled on this type of consensus algorithm. The conclusions are, first, that Bitcoin counterfeiting via “double-spending” attacks is inherently profitable, making payment finality based on proof-of-work extremely expensive. Second, the transaction market cannot generate an adequate level of “mining” income via fees as users free-ride on the fees of other transactions in a block and in the subsequent blockchain. Instead, newly minted bitcoins, known as block rewards, have made up the bulk of mining income to date. Looking ahead, these two limitations imply that liquidity is set to fall dramatically as these block rewards are phased out. Simple calculations suggest that once block rewards are zero, it could take months before a Bitcoin payment is final, unless new technologies are deployed to speed up payment finality. Second-layer solutions such as the Lightning Network might help, but the only fundamental remedy would be to depart from proof-of-work, which would probably require some form of social coordination or institutionalisation. |
| Keywords: | cryptocurrencies; crypto-assets; digital currencies; blockchain; proof-of-work; proof-of-stake; distributed ledger technology; consensus; bitcoin; ethereum; money; digitalisation; finance; history of money |
| JEL: | D20 D40 E42 E51 F31 G12 G28 G32 G38 L10 L50 |
| Date: | 2019–02–01 |
| URL: | http://d.repec.org/n?u=RePEc:fip:feddgw:355&r=all |
| By: | António Sousa Mendes (Faculty of Economics, University of Coimbra); Pedro Godinho (CeBER and Faculty of Economics, University of Coimbra) |
| Abstract: | In this paper we introduce NIESIM (Network Information Economics SIMulation), a software for simulating a mobile communications scenario and studying the value of information in the context of mobile network management. The modelling principles and the simulation strategy used to design and develop NIESIM software are introduced, along with simulation results. We consider an application of NIESIM to support the definition of the grade of service in a network that is exposed to failures. An exploratory discussion of the findings and their implications to future work is also presented. |
| Keywords: | Telecommunications, Mobile Networks Management, Value of Information, Simulation. |
| JEL: | C63 D81 L96 |
| Date: | 2019–04 |
| URL: | http://d.repec.org/n?u=RePEc:gmf:papers:2019-03&r=all |
| By: | Nathan, Max (University of Birmingham); Rosso, Anna (University of Milan) |
| Abstract: | We take a fresh look at firms' innovation-productivity linkages, using novel data capturing new aspects of innovative activity. We combine UK administrative microdata, media and website content to develop experimental metrics – new product/service launches – for a large panel of SMEs. Extensive validation and descriptive exercises show that launches complement patents, trademarks and innovation surveys. We also establish connections between launches and previous innovative activity. We then link IP, launches and productivity, controlling for media exposure and firm heterogeneity. Launch activity is associated with higher SME productivity, especially in the service sector. High-quality launches and medium-size firms help drive this result. |
| Keywords: | innovation, productivity, ICT, data science |
| JEL: | L86 |
| Date: | 2019–03 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp12213&r=all |
| By: | Derya Keles; Philippe Delacote; Alexander Pfaff; Siyu Qin; Michael B. Mascia |
| Abstract: | Protected areas (PAs) have been the most widely used tool to conserve ecosystem services. New PAs are created every year and the effective PAs block some economic development. Yet that opportunity cost of conservation leads PAs to have isolated locations and even to suffer considerable PA degazettements, downsizings and degradation (jointly ‘PADDD’). Adding to a sparse literature on PADDD, we assess some drivers of PAs’ size reductions, i.e., degazettements and downsizings. We base our empirical efforts upon a simple model of size reductions that result from interactions between agencies with differing objectives, conservation versus development. Gradients across space for the agency benefits and costs yield predictions about where each agency is most against, or for, size reductions for PAs. Analyzing Brazilian Amazon data from a relatively new and growing global data set from PADDDtracker, we find size reductions are influenced by: distance to cities and roads, i.e., transport that affects private profits and public enforcement costs; PA size, which affects enforcement costs; and previous deforestation in a PA, which lowers impacts of PADDD. |
| Keywords: | conservation, PADDD, Land-use change, Brazilian Amazon, public policy. |
| JEL: | Q56 Q57 Q58 O13 O21 |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:ulp:sbbeta:2019-12&r=all |
| By: | Chudik, Alexander (Federal Reserve Bank of Dallas); Georgiadis, Georgios (European Central Bank) |
| Abstract: | This paper proposes mixed-frequency distributed-lag (MFDL) estimators of impulse response functions (IRFs) in a setup where (i) the shock of interest is observed, (ii) the impact variable of interest is observed at a lower frequency (as a temporally aggregated or sequentially sampled variable), (iii) the data-generating process (DGP) is given by a VAR model at the frequency of the shock, and (iv) the full set of relevant endogenous variables entering the DGP is unknown or unobserved. Consistency and asymptotic normality of the proposed MFDL estimators is established, and their small-sample performance is documented by a set of Monte Carlo experiments. The proposed approach is then applied to estimate the daily pass-through of changes in crude oil prices observed at a daily frequency to U.S. gasoline consumer prices observed at a weekly frequency. We find that the pass-through is fast, with about 28% of the crude oil price changes passed through to retail gasoline prices within five working days, and that the speed of the pass-through has increased over time. |
| Keywords: | Mixed frequencies; temporal aggregation; impulse response functions; estimation and inference; VAR models |
| JEL: | C22 |
| Date: | 2019–03–15 |
| URL: | http://d.repec.org/n?u=RePEc:fip:feddgw:356&r=all |
| By: | Ivor Beazley; Sean Dougherty; Chris James; Caroline Penn; Leah Phillips |
| Abstract: | Based on an OECD survey, this paper presents quantitative and qualitative data on the decentralisation of health systems, focusing on how they vary according to different institutional characteristics and what types of performance measurement systems are used in the health sector. Decision-making in health care tends to rest largely with the central government, which has considerable power across many aspects of the delivery of health services. However, sub-national governments have more control over decisions regarding the inputs, outputs and monitoring of health care services. The majority of OECD countries tends to rely on centralised performance measurement systems, especially to monitor the performance of hospital providers, focusing more on improving performance rather than reducing service costs. Less likely to be monitored under a specific performance framework are providers of ancillary services, retailers and other providers of medical goods, and providers of preventive care. |
| Keywords: | Health systems, intergovernmental relations, performance monitoring |
| JEL: | H75 I18 O43 |
| Date: | 2019–04–18 |
| URL: | http://d.repec.org/n?u=RePEc:oec:ctpaab:28-en&r=all |
| By: | OECD |
| Abstract: | This report, part of the “Cities” collection, analyses road accessibility, transport corridors and checkpoints set up in border towns in West Africa. An innovative model shows that the population base of border towns could be 14% greater if there were no delays at border crossings. The existence of roadside checks decreases the size of this population base from 12 to 50%. A study of 59 jointly planned or operated border posts in sub-Saharan Africa shows that trade facilitation runs up against the special interests of public servants and private-sector actors making a living from regional integration frictions.Also in this Collection: “Regional Integration in Border Cities”, No. 20 “Population and Morphology of Border Cities”, No. 21 “Businesses and Health in Border Cities”, No. 22 |
| Keywords: | border posts, infrastructure, regional trade, road accessibility, transport corridors, urban networks |
| JEL: | O18 O21 R41 R42 |
| Date: | 2019–04–18 |
| URL: | http://d.repec.org/n?u=RePEc:oec:swacaa:23-en&r=all |
| By: | Kevin Hjortshøj O'Rourke; Ahmed Rahman; Alan M. Taylor |
| Abstract: | Why did per capita income divergence occur so dramatically during the 19th Century, rather than at the outset of the Industrial Revolution? How were some countries able to reverse this trend during the globalization of the late 20th Century? To answer these questions, this paper develops a trade-and-growth model that captures the key features of the Industrial Revolution and Great Divergence between a core industrializing region and a peripheral and potentially lagging region. The model includes both endogenous biased technological change and intercontinental trade. An Industrial Revolution begins as a sequence of more unskilled-labor-intensive innovations in both regions. We show that the subsequent co-evolution of trade and directed technologies can create a delayed but inevitable divergence in demographics and living standards—the peripheral region increasingly specializes in production that worsens its terms of trade and spurs even greater fertility increases and educational declines. Allowing for technological diffusion between regions can mitigate and even reverse divergence, spurring a reversal of fortune for peripheral regions. |
| JEL: | F11 F16 F43 J10 J24 N10 N30 O11 O19 O33 O4 O41 |
| Date: | 2019–04 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:25741&r=all |
| By: | Kevin A. Bryan; Yasin Ozcan; Bhaven N. Sampat |
| Abstract: | We introduce, validate, and provide a public database of a new measure of the knowledge inventors draw on: scientific references in patent specifications. These references are common and algorithmically extractable. Critically, they are very different from the “front page” prior art commonly used to proxy for inventor knowledge. Only 24% of front page citations to academic articles are in the patent text, and 31% of in-text citations are on the front page. We explain these differences by describing the legal rules and practice governing citation. Empirical validations suggest that in-text citations appear to more accurately measure real knowledge flows, consistent with their legal role. |
| JEL: | O3 |
| Date: | 2019–04 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:25742&r=all |
| By: | O'Rourke, Kevin Hjortshøj; Rahman, Ahmed; Taylor, Alan M. |
| Abstract: | Why did per capita income divergence occur so dramatically during the 19th Century, rather than at the outset of the Industrial Revolution? How were some countries able to reverse this trend during the globalization of the late 20th Century? To answer these questions, this paper develops a trade-and-growth model that captures the key features of the Industrial Revolution and Great Divergence between a core industrializing region and a peripheral and potentially lagging region. The model includes both endogenous biased technological change and intercontinental trade. An Industrial Revolution begins as a sequence of more unskilled-labor-intensive innovations in both regions. We show that the subsequent co-evolution of trade and directed technologies can create a delayed but inevitable divergence in demographics and living standards-the peripheral region increasingly specializes in production that worsens its terms of trade and spurs even greater fertility increases and educational declines. Allowing for technological diffusion between regions can mitigate and even reverse divergence, spurring a reversal of fortune for peripheral regions. |
| Keywords: | "North-South" model; "West-East" model; demog- raphy; education; Endogenous Growth; Fertility; industrial revolution; skill premium; Unified growth theory |
| JEL: | F11 F16 F43 J10 J24 N10 N30 O11 O19 O33 O4 O41 |
| Date: | 2019–04 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:13674&r=all |
| By: | Ruiz-Buforn, Alba; Alfarano, Simone; Camacho-Cuena, Eva |
| Abstract: | This paper studies the effects on the asset price of the introduction of a public signal in the presence of asymmetric private information in a decentralized market. We introduce an artificial market model populated by boundedly rational agents with heterogeneous levels of reasoning: sophisticated and naive traders. The model captures the main impacts of public information analyzed in the laboratory experiments reported by Ruiz-Buforn et al. (2019). Public information, when correct, coordinates market activity, improving price convergence to the fundamentals. By contrast, unwarranted public information pushes prices away from fundamentals. This strong influence of public information on prices is primarily driven by its common knowledge property. |
| Keywords: | Public information; asset markets; asymmetric information |
| JEL: | C90 D80 D82 G10 |
| Date: | 2019–04–13 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:93288&r=all |
| By: | Leal Vizcaíno René; Mekonnen Teddy |
| Abstract: | We study how information affects equilibria and welfare in games. For an agent, more precise information about an unknown state of the world leads to a mean-preserving spread of beliefs. We provide necessary and sufficient conditions to obtain either a non-increasing mean or a non-decreasing-mean spread of actions whenever information precision increases for at least one agent. We apply our Bayesian comparative statics framework to study informational externalities in strategic environments. In persuasion games, we derive sufficient conditions that lead to extremal disclosure of information. In oligopolistic markets, we characterize the incentives of firms to share information. In macroeconomic models, we show that information not only drives the amplitude of business cycles but also affects aggregate output. |
| Keywords: | Comparative Statics;Information Acquisition;Information Orders;Persuasion;Value of Information;Supermodular Games |
| JEL: | C44 C61 D42 D81 |
| Date: | 2019–03 |
| URL: | http://d.repec.org/n?u=RePEc:bdm:wpaper:2019-03&r=all |
| By: | Mehl, Arnaud; Schmitz, Martin; Tille, Cédric |
| Abstract: | Does distance matter for the volatility of international real and financial transactions? We show that it does, in addition to its well-established relevance for the level of trade. A simple model of trade with endogenous markups shows that demand shocks have a larger impact on trade between more distant countries. We test this implication in two steps, relying on a broad range of real and financial transactions measures, as well as several different metrics of distance (physical, linguistic, and internet). We first show that during the Great Trade Collapse of 2007-09 international transactions fell more between countries that are more distant along the various metrics, and find that the different distance measures magnify each other's respective impacts. We then focus on a longer panel analysis of trade in goods and show that trade is more volatile between more distant countries, with again a magnification pattern across metrics of distance. |
| Keywords: | distance,gravity,volatility,international trade,international finance,Great Trade Collapse |
| JEL: | F10 F30 |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:ifwkwp:2125&r=all |
| By: | OECD |
| Abstract: | On 15-16 February 2018 the Organisation for Economic Co-operation and Development (OECD) hosted a Workshop on Digital Security and Resilience in Critical Infrastructure and Essential Services. The workshop brought together over 120 participants to discuss the effects of growing digital transformation on the resilience of critical infrastructures and essential services which rely increasingly on cross-border digital infrastructure. Over 25 experts discussed digital security in the financial, energy and transport sectors, in relation to the delivery of public sector services, and from the digital security public policy making perspective. Issues faced by SMEs were also addressed throughout the event. This report provides key cross-cutting high-level policy messages from the workshop, an issues paper developed to prepare the event, as well as a detailed account of discussions in each session. |
| Date: | 2019–04–19 |
| URL: | http://d.repec.org/n?u=RePEc:oec:stiaab:281-en&r=all |
| By: | Ashenfelter, Orley C; Graddy, Kathryn |
| Abstract: | Works of art and culture are sold by many means. These include transactions between dealers and their customers, auctions with open outcry, internet auctions, and even, occasionally, sealed bid auctions. However, the standard procedure for establishing art valuations for the most expensive works is still most commonly the English auction, where prices ascend in open bidding. This paper describes how art auctions really work, along with the state of competition between auction houses. For expensive art, competition is dominated by the duopoly of Christie's and Sotheby's. The paper proceeds to describe various interesting features of art auctions, including the declining price anomaly, whether or not auctioneers provide accurate information, and anchoring effects in art auctions. The public auction system provides a valuable method for setting and determining values; it is probable that the inability of auctioneers to capture a significant part of the benefits of the information they produce leads to less use of the auction system than is optimal for society. |
| Keywords: | Art auctions |
| JEL: | D44 Z11 |
| Date: | 2019–04 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:13665&r=all |
| By: | Ufuk Akcigit; Sina T. Ates |
| Abstract: | In the past several decades, the U.S. economy has witnessed a number of striking trends that indicate a rising market concentration and a slowdown in business dynamism. In this paper, we make an attempt to understand potential common forces behind these empirical regularities through the lens of a micro-founded general equilibrium model of endogenous firm dynamics. Importantly, the theoretical model captures the strategic behavior between competing firms, its effect on their innovation decisions, and the resulting “best versus the rest” dynamics. We focus on multiple potential mechanisms that can potentially drive the observed changes and use the calibrated model to assess the relative importance of these channels with particular attention to the implied transitional dynamics. Our results highlight the dominant role of a decline in the intensity of knowledge diffusion from the frontier firms to the laggard ones in explaining the observed shifts. We conclude by presenting new evidence that corroborates a declining knowledge diffusion in the economy. We document a higher concentration of patenting in the hands of firms with the largest stock and a changing nature of patents, especially in the post-2000 period, which suggests a heavy use of intellectual property protection by market leaders to limit the diffusion of knowledge. These findings present a potential avenue for future research on the drivers of declining knowledge diffusion. |
| JEL: | E22 L12 O31 O33 |
| Date: | 2019–04 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:25756&r=all |
| By: | Thierry Kirat (Université Paris-Dauphine; PSL Research Universit; IRISSO CNRS); Frédéric Marty (Université Côte d'Azur, France; GREDEG CNRS) |
| Abstract: | Cet article met en relief l'implication des fondations d'entreprises dans le développement de la Law and Economics aux Etats-Unis des lendemains de la Seconde Guerre Mondiale aux années Reagan. Il s'appuie notamment sur l'analyse de trajectoires individuelles ou collectives, qu'il s'agisse des programmes de recherche menés à l'université de Chicago par Aaron Director autour de l'antitrust, des programmes de formation des juges portés par Henry Manne ou encore des travaux académiques et du parcours administratif de Robert Bork. Il met l'accent sur le rôle de fondations d'entreprises pro-marché dans l'essor de la Law and Economics et sur son impact sur les manières de juger. |
| Keywords: | Economie du droit, Antitrust, Originalisme, Conservatisme |
| JEL: | B21 B31 K21 N42 |
| Date: | 2019–04 |
| URL: | http://d.repec.org/n?u=RePEc:gre:wpaper:2019-14&r=all |
| By: | Bircan, Cagatay; de Haas, Ralph |
| Abstract: | We exploit historically-determined variation in local credit markets to identify the impact of bank lending on firm innovation across Russia. We find that deeper credit markets increase firms' use of bank credit, their adoption of new products and technologies, and productivity growth. This relationship is more pronounced in industries further from the technological frontier; more exposed to import competition; and that export more. These impacts are also stronger for firms near historical R&D centers or railways, and in regions with supportive institutions. Consistent with these results, credit markets contribute to economic growth in such regions. |
| Keywords: | credit constraints; Firm innovation; institutions; Russia; Technological change |
| JEL: | D22 G21 O12 O31 |
| Date: | 2019–04 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:13663&r=all |
| By: | Abozaid, Abdulazeem |
| Abstract: | The Islamic financial institutions are criticized for failure to play their perceived role in terms of assuming social responsibility. They are expected, based on their inception philosophy, to contribute to the social welfare in the societies in which they operate and to the advancement of these societies. The study examines the validity of assuming these institutions some social responsibility, the different tools and vehicles through which these institutions can provide the desired social benefit, and the Shariah rules to carry out this role. The research concludes that Islamic financial institutions must assume some social responsibility in a manner that does not harm the very purpose for which they have been established. The fact that they fail to carry out their social responsibilities is often the result of administrative shortcomings in these institutions, in addition to the adoption of some controversial financing instruments that would defy and social good. The paper also proposes some vehicles through which Islamic financial institutions shall play a positive social role. |
| Keywords: | Social responsibility, Islamic banks, Islamic finance, corporate social responsibility |
| JEL: | K0 P0 Z13 |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:93301&r=all |
| By: | Millard, Stephen (Bank of England); Nicolae, Anamaria (Durham University Business School); Nower, Michael (Durham University Business School) |
| Abstract: | In this paper we examine the impact of non-trading firms on labour productivity and its persistence in response to macroeconomic shocks, through their entry and exit into the domestic market, in a model with monopolistic competition and heterogeneous firms. We quantify the effects of various macroeconomic shocks on labour productivity and we demonstrate that non-trading domestic firms’ entry and exit into the domestic market explains the persistence of labour productivity in response to transitory shocks. We also show that the model successfully replicates the sluggish recovery of labour productivity in the United Kingdom since the Great Recession. |
| Keywords: | International trade; heterogeneous firms; productivity; endogenous persistence |
| JEL: | E24 F17 J24 O40 |
| Date: | 2019–04–12 |
| URL: | http://d.repec.org/n?u=RePEc:boe:boeewp:0787&r=all |