nep-pay New Economics Papers
on Payment Systems and Financial Technology
Issue of 2017‒06‒25
ten papers chosen by
Bernardo Bátiz-Lazo
Bangor University

  1. Computing the everyday: social media as data platforms By Cristina Alaimo; Jannis Kallinikos
  2. Exploring portfolio diversification opportunities in Islamic capital markets through bitcoin: evidence from MGARCH-DCC and Wavelet approaches By Lim, Siok Jin; Masih, Mansur
  3. Quantifying the Benefits of Infrastructure Sharing By Matthew Andrews; Milan Bradonjic; Iraj Saniee
  4. Where is the virtual self? Virtual worlds and the self as a cyborg By Simon Evans
  5. An empirical assessment of the Swedish Bullionist Controversy By Nils Herger
  6. The economics of ownership, access and trade in digital data By Georgios Alaveras; Estrella Gomez-Herrera; Bertin Martens
  7. Children and the Data Cycle:Rights and Ethics in a Big Data World By Gabrielle Berman; Kerry Albright
  8. "Understanding Financialization: Standing on the Shoulders of Minsky" By Charles J. Whalen
  9. Virtual Relationships: Short- and Long-run Evidence from BitCoin and Altcoin Markets By Pavel Ciaian; Miroslava Rajcaniova; d'Artis Kancs
  10. IT and AI Technology and New Agricultural Management (Japanese) By YAMASHITA Kazuhito

  1. By: Cristina Alaimo; Jannis Kallinikos
    Abstract: We conceive social media platforms as sociotechnical entities that variously shape user platform involvement and participation. Such shaping develops along three fundamental data operations that we subsume under the terms of encoding, aggregation, and computation. Encoding entails the engineering of user platform participation along narrow and standardized activity types (e.g., tagging, liking, sharing, following). This heavily scripted platform participation serves as the basis for the procurement of discrete and calculable data tokens that are possible to aggregate and, subsequently, compute in a variety of ways. We expose these operations by investigating a social media platform for shopping. We contribute to the current debate on social media and digital platforms by describing social media as posttransactional spaces that are predominantly concerned with charting and profiling the online predispositions, habits, and opinions of their user base. Such an orientation sets social media platforms apart from other forms of mediating online interaction. In social media, we claim, platform participation is driven toward an endless online conversation that delivers the data footprint through which a computed sociality is made the source of value creation and monetization.
    Keywords: categories; classification; data infrastructures; posttransactional spaces; social data; sociality; social interaction; social media platforms
    JEL: L91 L96
    Date: 2017–06–02
  2. By: Lim, Siok Jin; Masih, Mansur
    Abstract: Bitcoin is a form of digital currency that is circulating without the backing of any central bank and monitoring authority. Therefore, sceptics regularly question the status of Bitcoin as a legal tender. Nevertheless, due to increasing popularity and importance of Bitcoin, practitioners and researchers have recently started to assess Bitcoin from the perspective of business, economics and finance. This paper explores possibilities of using Bitcoin as a portfolio optimisation strategy for Islamic fund managers. We use three recent and appropriate methodologies: M-GARCH-DCC, Continuous Wavelet Transforms (CWT), and Maximum Overlap Discrete Wavelet Transform (MODWT). The results significantly tend to indicate that Bitcoin and Shari’ah stock indices are lowly and negatively correlated, suggesting that Islamic stock investors can benefit from diversification with Bitcoin and that the fundamentals of such crypto-currencies can be further investigated for the benefit of Islamic capital markets.
    Keywords: Islamic stocks, Bitcoin, portfolio diversification, MGARCH-DCC, Wavelets
    JEL: C58 E44 G15
    Date: 2017–06–15
  3. By: Matthew Andrews; Milan Bradonjic; Iraj Saniee
    Abstract: We analyze the benefits of network sharing between telecommunications operators. Sharing is seen as one way to speed the roll out of expensive technologies such as 5G since it allows the service providers to divide the cost of providing ubiquitous coverage. Our theoretical analysis focuses on scenarios with two service providers and compares the system dynamics when they are competing with the dynamics when they are cooperating. We show that sharing can be beneficial to a service provider even when it has the power to drive the other service provider out of the market, a byproduct of a non-convex cost function. A key element of this study is an analysis of the competitive equilibria for both cooperative and non-cooperative 2-person games in the presence of (non-convex) cost functions that involve a fixed cost component.
    Date: 2017–06
  4. By: Simon Evans
    Abstract: In the context of widespread availability of digital technology as a means for interacting with others, it is useful to explore the extent to which participation in online environments, such as virtual worlds, reflect a transformation in the experience of self in society. One approach is to consider how self emerges from the context provided by the interactions that occur across and within physical and virtual environments, through capturing the experience of someone as they actively engage with a virtual world. This can be done employing Subjective Evidence-Based Ethnography (SEBE) methodologies. SEBE involves first-person audio-visual recording of experience with a subcam (a miniature video-camera worn at eye level), followed by a Replay Interview (RIW) using the recording to collect participant subjective experience. In this study, participants’ usage of the virtual world Second Life has been recorded, capturing the inworld virtual activity and the physical world context in which it is framed. Inductive thematic analysis of the data arising from the usage sessions and the RIWs reveals a number of findings. There are several levels of interaction occurring between the virtual world user, their avatar, other users, the virtual world technology, and the physical environment. The experience of self that emerges is one in multiple locations, bridged by technological mediation, such that someone who uses virtual worlds becomes a form of cyborg.
    Keywords: virtual self; virtual worlds; Second Life; subjective evidence-based ethnography; digital ethnography; cyborg
    JEL: L91 L96
    Date: 2016
  5. By: Nils Herger (Study Center Gerzensee)
    Abstract: In the eighteenth century, a fierce political debate broke out in Sweden about the causes of an extraordinary depreciation of its currency. More specifically, the dete- riorating value of the Swedish daler was discretionarily blamed on monetary causes, e.g. the overissuing of banknotes, or nonmonetary causes, such as balance of payments deficits. This paper provides a comprehensive empirical assessment of this so-called "Swedish Bullionist Controversy". The results of vector autoregressions suggest that increasing amounts of paper money did give rise to in ation and a depreciation of the exchange rate. Conversely, nonmonetary factors were probably less important for these developments.
    Date: 2017–06
  6. By: Georgios Alaveras (European Commission – JRC); Estrella Gomez-Herrera (European Commission – JRC); Bertin Martens (European Commission – JRC)
    Abstract: This study measures the extent of cross-border geo-blocking and the impact on product availability and pricing for three non-audio-visual digital media products (music, e-books and games) in the EU Digital Single Market. We find that cross-border access to online media stores is generally blocked for the products and distributors surveyed in this study, though it can usually be circumvented. By contrast, cross-border availability is high, reaching around 98.6% for e-books on Amazon, 90% for downloadable music on iTunes, and 81.1% and 90.5% respectively for PS3 and PS4 PlayStation games. We could not directly verify cross-border availability of music in streaming services but a small sample test suggests that it could reach around 96% on Spotify. We find that the frequency of cross-country price differentiation is limited for games in the Sony PlayStation stores (less than 4%) but higher for downloadable music in the Apple iTunes stores (11.5%) and Amazon e-book stores (26%). Much of this price differentiation is driven by exchange rates and rounding off prices in country stores not denominated in Euro. In music, price discrimination is used mostly to extract higher prices from high-income consumers and for more popular songs with a lower price elasticity of demand. Subscription prices for main music streaming services are strongly correlated with country per capita income levels. Geographical market differentiation and geo-blocking in digital media is often attributed to the territoriality of the copyright management regime. In most cases rights holders are in a position to issue multi-territorial licenses. For commercial reasons however they may prefer to exercise their rights on a territorial basis. The welfare effect of geo-blocking on sellers can be safely assumed to be positive otherwise sellers would not apply this commercial strategy. The impact on consumer welfare is a-priori ambiguous. Geo-blocking reduces the extent of product variety available to consumers. Whether it increases or reduces consumer welfare is an empirical question. The data required to empirically estimate the impact of (lifting) geo-blocking restrictions on welfare are held by the private platform operators. A future assessment can only be made if the required data on product prices and sales are made available to independent researchers. Lifting geo-blocking restrictions will induce price arbitrage between country markets. That may put pressure on sellers to reduce price differentiation and push some prices up, others down. The price response of sellers is hard to predict and may have repercussions not only on downstream consumers but also on upstream parts of the supply chain. Price convergence is unlikely to be perfect and some differentiation may continue to exist because trade costs between country stores may not fall to zero (exchange rates, means of payment, linguistic trade barriers, etc.).
    Keywords: digital single market, copyright, digital media, audio-visual, music, e-books, online games
    JEL: D23 K11
    Date: 2017–06
  7. By: Gabrielle Berman; Kerry Albright
    Abstract: In an era of increasing dependence on data science and big data, the voices of one set of major stakeholders – the world’s children and those who advocate on their behalf – have been largely absent. A recent paper estimates one in three global internet users is a child, yet there has been little rigorous debate or understanding of how to adapt traditional, offline ethical standards for research involving data collection from children, to a big data, online environment (Livingstone et al., 2015). This paper argues that due to the potential for severe, long-lasting and differential impacts on children, child rights need to be firmly integrated onto the agendas of global debates about ethics and data science. The authors outline their rationale for a greater focus on child rights and ethics in data science and suggest steps to move forward, focusing on the various actors within the data chain including data generators, collectors, analysts and end-users. It concludes by calling for a much stronger appreciation of the links between child rights, ethics and data science disciplines and for enhanced discourse between stakeholders in the data chain, and those responsible for upholding the rights of children, globally.
    Keywords: children; data collection; data processing programmes; data protection; ethics; internet; research;
    Date: 2017
  8. By: Charles J. Whalen
    Abstract: Since the death of Hyman Minsky in 1996, much has been written about financialization. This paper explores the issues that Minsky examined in the last decade of his life and considers their relationship to that financialization literature. Part I addresses Minsky's penetrating observations regarding what he called money manager capitalism. Part II outlines the powerful analytical framework that Minsky used to organize his thinking and that we can use to extend his work. Part III shows how Minsky's observations and framework represent a major contribution to the study of financialization. Part IV highlights two keys to Minsky's success: his treatment of economics as a grand adventure and his willingness to step beyond the world of theory. Part V concludes by providing a short recap, acknowledging formidable challenges facing scholars with a Minsky perspective, and calling attention to the glimmer of hope that offers a way forward.
    Keywords: Hyman Minsky; Money Manager Capitalism; Financialization
    JEL: B31 B52 G
    Date: 2017–06
  9. By: Pavel Ciaian; Miroslava Rajcaniova; d'Artis Kancs
    Abstract: This study empirically examines interdependencies between BitCoin and altcoin markets in the short- and long-run. We apply time-series analytical mechanisms to daily data of 17 virtual currencies (BitCoin + 16 alternative virtual currencies) and two Altcoin price indices for the period 2013-2016. Our empirical findings confirm that indeed BitCoin and Altcoin markets are interdependent. The BitCoin-Altcoin price relationship is significantly stronger in the short-run than in the long-run. We cannot fully confirm the hypothesis that the BitCoin price relationship is stronger with those Altcoins that are more similar in their price formation mechanism to BitCoin. In the long-run, macro-financial indicators determine the altcoin price formation to a greater degree than BitCoin does. The virtual currency supply is exogenous and therefore plays only a limited role in the price formation.
    Date: 2017–06
  10. By: YAMASHITA Kazuhito
    Abstract: Certain advanced technology such as biotechnology have not made any great or significant contributions to the advancement of agriculture. Researchers have only explored the feasibility of technology and have yet to consider the aspects of economics or management. This applies to a portion of the agricultural industry such as fruits and vegetables but does not pertain to grain production which is a vital and indispensable food source for humans. Furthermore, technology has made partial improvements to agricultural production but has not provided fundamental solutions for Japanese agriculture in general. There are concerns that the same kinds of mistakes made in the past technological developments may be repeated in the current application of information technology (IT) and artificial intelligence (AI) technology to agriculture. IT and AI technology, which gathers, analyzes, or assimilates information, could potentially improve the agricultural system as a whole while biotechnology has only addressed the production side. In particular, if we could create open access big data along with an appropriate agricultural policy reform, Japanese agriculture would be drastically enhanced by IT and AI technology. The open access big data will enable IT and AI technology to make great contributions to the national food security. In order to create open access big data, we have to overcome numerous problems including how to collect interoperable data among different stakeholders and how to support farmers and industry participants who are not necessarily well versed in those technologies. In these aspects, this paper tries to make specific policy proposals to overcome such difficulties.
    Date: 2017–06

This nep-pay issue is ©2017 by Bernardo Bátiz-Lazo. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
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