nep-pay New Economics Papers
on Payment Systems and Financial Technology
Issue of 2017‒11‒05
34 papers chosen by
Bernardo Bátiz-Lazo
Bangor University

  1. Valuating the environmental impact of debit card payments By Erik Roos Lindgreen; Milan van Schendel; Nicole Jonker; Jorieke Kloek; Lonneke de Graaff; Marc Davidson
  2. Value-based Customers Satisfaction and Continuance Intention for Mobile Financial Services: the roles of Utilitarian, Hedonic, and Personal Values By Omigie, N. O.
  3. Network Sharing: Cooperating, Co-opting and Competing By Dasgupta, Kalyan; Williams, Mark
  4. Retail credit scoring using fine-grained payment data By TOBBACK, Ellen; MARTENS, David
  5. Mobile Network Sharing By Neumann, Karl-Heinz; Plückebaum, Thomas
  6. Regulatory Learning: how to supervise machine learning models? An application to credit scoring By Dominique Guegan; Bertrand Hassani
  7. A Conjoint Analysis on e-book Market in Japan By Ueda, Masashi
  8. Evaluating Market Consolidation in Mobile Communications By Christos Genakos; Tommaso M. Valletti; Frank Verboven
  9. Economic aspects of embedded SIM for the telecommunications consumer segment By Wernick, Christian; Gries, Christin Isabel
  10. Measuring the “Free” Digital Economy Within the GDP and Productivity Accounts By Nakamura, Leonard I.; Samuels, Jon; Soloveichik, Rachel
  11. Data Network Effects: Implications for Data Business By Mitomo, Hitoshi
  12. Structure of P2P lending and investor protection: Analyses based on an international comparison of legal arrangements By Atsushi Samitsu
  13. How stable is the internet to malign or economic interference? By Lindeberg, Fredrik
  14. E-Commerce as Asia's New Growth Engine By Fukunari Kimura; Lurong Chen
  15. An Index of Regulatory Practices for Financial Inclusion in Latin America: Enablers, Promoters, and Preventers By Liliana Rojas-Suarez; Lucía Pacheco
  16. Towards Smarter Consumer Protection Rules for Digital Services By de Streel, Alexandre; Sibony, Anne-Lise
  17. To Enhance E-Commerce Enabling Connectivity in Asia By Fukunari Kimura; Lurong Chen
  18. Technology Case Study: Virtual Lifestyles and Sustainable Economic Development By Mamoon, Dawood
  19. What is the Value of Re-use? Complementarities in Popular Music By Jeremy Watson
  20. Cities and the Structure of Social Interactions: Evidence from Mobile Phone Data By Konstantin Büchel; Maximilian von Ehrlich
  21. Stock Market Reactions to India's 2016 Demonetization: Implications for Tax Evasion, Corruption, and Financial Constraints By Dhammika Dharmapala; Vikramaditya Khanna
  22. Little Bytes: Zero Rating, Digital Divide and Competition in Africa By Kapatamoyo, Musonda
  23. Equity Crowdfunding in Germany and the UK: Follow-up Funding and Firm Survival By Lars Hornuf; Matthias Schmitt
  24. Financial Firm Production of Inside Monetary and Credit Card Services: An Aggregation Theoretic Approach By Barnett, William; Su, Liting
  25. Evaluating Customer Reviews in Matching Services on the Internet By Nakamura, Akihiro
  26. Apparent Competition in Two-Sided Platforms By Gokhan Guven; Eren Inci; Antonio Russo
  27. Online Social Networks: Approval by Design By Matthew Ellman
  28. New Zealand's ICT Strategy: The Respective Roles of Senior and Middle Management in Promoting Collaboration and Innovation By Suzanne Jones and Tony Hooper
  29. Customer Consolidated Routing Problem – An Omni-channel Retail Study By Paul, J.; Agatz, N.A.H.; Spliet, R.; de Koster, M.B.M.
  30. Omnimetrics and Awards By Bruno S. Frey
  31. Instability of Broadband Policies in the U.S. Compared to Canada By Cherry, Barbara A.
  32. Understanding Discrimination against Same-Sex Couples in the United States: Evidence from an Email Correspondence Audit By David Schwegman
  33. Competition and Product Misrepresentation By Daniel Goetz
  34. The Gift and Pay-What-You-Want Pricing By Egbert, Henrik

  1. By: Erik Roos Lindgreen; Milan van Schendel; Nicole Jonker; Jorieke Kloek; Lonneke de Graaff; Marc Davidson
    Abstract: Purpose: Consumers in the Netherlands made more than 3.2 billion debit card transactions at points-of-sale in 2015, corresponding to over half of all point-of-sale payments in that year. This study provides insights into the environmental impact of debit card transactions based on a life cycle assessment (LCA). In addition, it identifies several areas within the debit card payment chain where the environmental impact can be reduced. Conclusions: For the first time, the environmental consequences of electronic card payment systems are evaluated. The total environmental impact of debit card transactions in the Netherlands is relatively modest compared to the impact of cash payments, which are the closest substitute of debit card payments at the point-of-sale. Scenario analysis indicates that the environmental impact can be reduced by 44%.
    Keywords: Datacentre; Debit card payment system; Debit card; Environmental impact; LCA; Payment terminal
    JEL: E42 Q50
    Date: 2017–10
  2. By: Omigie, N. O.
    Abstract: “M-PESA” mobile financial service has remained a dominate player in the Kenya financial service market. This study presents a conceptual research model that is grounded in means-end theory. It connects customer value hierarchy to customer attitudes and post-adoption outcomes behavior. It aims to investigate the impacts of customer value in a hierarchical order on customer satisfaction and continuance use intention. When empirically validated, it will present a value-based framework for examining the influences of customer value on customer attitudes and behavior. The model presents both theoretical and practical implications for both academia and MFS providers and marketing managers.
    Keywords: MFS,M-PESA,means-end theory,customer value hierarchy,utilitarian value,hedonic value,personal values
    Date: 2017
  3. By: Dasgupta, Kalyan; Williams, Mark
    Abstract: Network sharing arrangements are common between mobile operators in Europe. There is also increasing interest in “co-investment” between fixed networks. Such arrangements have generally been cleared by anti-trust authorities. However, with the industry continually evolving and new types of sharing arrangements being proposed, it is important to review the competition implications of such deals.
    Date: 2017
  4. By: TOBBACK, Ellen; MARTENS, David
    Abstract: In this big data era, banks (like any other large company) are looking for novel ways to leverage their existing data assets. A major data source that has not been used to the full extent yet, is the massive fine-grained payment data on their customers. In this paper, a design is proposed that builds predictive credit scoring models using the fine-grained payment data. Using a real-life data set of 183 million transactions made by 2.6 million customers, we show that our proposed design adds complementary predictive power to the current credit scoring models. Such improvement has a big impact on the overall working of the bank, from applicant scoring to minimum capital requirements.
    Date: 2017–10
  5. By: Neumann, Karl-Heinz; Plückebaum, Thomas
    Date: 2017
  6. By: Dominique Guegan (Centre d'Economie de la Sorbonne and LabEx ReFi); Bertrand Hassani (Group Capgemini and Centre d'Economie de la Sorbonne and LabEx ReFi)
    Abstract: The arrival of big data strategies is threatening the lastest trends in financial regulation related to the simplification of models and the enhancement of the comparability of approaches chosen by financial institutions. Indeed, the intrinsic dynamic philosophy of Big Data strategies is almost incompatible with the current legal and regulatory framework as illustrated in this paper. Besides, as presented in our application to credit scoring, the model selection may also evolve dynamically forcing both practitioners and regulators to develop libraries of models, strategies allowing to switch from one to the other as well as supervising approaches allowing financial institutions to innovate in a risk mitigated environment. The purpose of this paper is therefore to analyse the issues related to the Big Data environment and in particular to machine learning models highlighting the issues present in the current framework confronting the data flows, the model selection process and the necessity to generate appropriate outcomes.
    Keywords: Big Data; Credit scoring; machine learning; AUC; regulation
    Date: 2017–07
  7. By: Ueda, Masashi
    Abstract: The e-book market in Japan is growing in this decade and according to Impress R&D this tendency will be continue. In this paper, we collected 3,000 samples by online survey and found a tendency of consumption of e-book in Japan by using conjoint analysis. We found 1) attachment to physical objects in Japanese consumers, 2) high MWTP for device and providers. We check this by other questions and found tendency of Japanese consumer for e-distribution services.
    Keywords: online distribution,conjoint analysis,consumer survey
    Date: 2017
  8. By: Christos Genakos; Tommaso M. Valletti; Frank Verboven
    Abstract: We study the dual relationship between market structure and prices and between market structure and investment in mobile telecommunications. Using a uniquely constructed panel of mobile operators’ prices and accounting information across 33 OECD countries between 2002 and 2014, we document that more concentrated markets lead to higher end user prices. Furthermore, they also lead to higher investment per mobile operator, though the impact on total investment is not conclusive. Our findings are not only relevant for the current consolidation wave in the telecommunications industry. More generally, they stress that competition and regulatory authorities should take seriously the potential trade-off between market power effects and efficiency gains stemming from agreements between firms.
    Keywords: mobile telecommunications, market structure, prices, investments, mergers
    JEL: K20 L10 L40 L96
    Date: 2017
  9. By: Wernick, Christian; Gries, Christin Isabel
    Abstract: After having been developed for Machine-to-Machine (M2M) communication, standardised embedded SIM (eSIM) solutions are about to be launched in the telecommunications consumer segment. At this early market stage, various details of eSIM implementation have not been fixed yet. Our paper aims to generate a well-founded understanding of characteristics and potential use cases and their likely impact on existing processes and market structures. Overall, eSIM seems unlikely to become a game changer in the mobile market in the short run. It offers, however, some potential to ease existing processes, improve customer satisfaction and generate new sources of revenues at different stages of the value chain.
    Keywords: Mobile,strategy,technological change
    Date: 2017
  10. By: Nakamura, Leonard I. (Federal Reserve Bank of Philadelphia); Samuels, Jon (U.S. Bureau of Economic Analysis); Soloveichik, Rachel (U.S. Bureau of Economic Analysis)
    Abstract: We develop an experimental methodology that values ”free” digital content through the lens of a production account and is consistent with the framework of the national accounts. We build upon the work in Nakamura, et al. (2016) by combining marketing- and advertising-supported content and find that the impact of ”free” digital content on U.S. gross domestic product (GDP) has accelerated in recent years, particularly since 2005. However, the explosion in ”free” digital content is partially offset by a decrease in ”free” print content like newspapers. Including these, real GDP growth would grow at 1.53 percent a year from 2005 to 2015 rather than the official growth rate of 1.42 percent, a tenth of a percent faster. Thus, there is a substantive impact on 2005 to 2015 real growth, even when we do not measure the full consumer surplus benefits of free goods. In addition, from 1995 to 2005, real GDP growth, including ”free” content, would grow 0.07 percentage point faster, and in the earlier period, from 1929 to 1995, 0.01 percentage point faster. We further find that the personal consumption expenditures (PCE) and core PCE deflators would have risen about 0.1 percentage point more slowly from 2005 to 2015. To analyze the impact of ”free” content on measured private business total factor productivity (TFP) growth, we account for inputs of ”free” content used in production. We find that TFP would grow faster by 0.07 percentage point per year from 2005 to 2014 and faster by 0.07 percentage point from 1995 to 2005.
    Keywords: Internet; productivity; advertising; marketing; measurement; GDP
    JEL: C82 L81 M37 O3
    Date: 2017–10–23
  11. By: Mitomo, Hitoshi
    Abstract: This paper aims to investigate the existence of “data network effects” in data platform services such as Big Data, Internet-of-Things (IoT) and Artificial Intelligence (AI) and their influence on the diffusion of the services. It intendsto present a preliminary formal analysis ofthe effects of data network externalities.Policy implications will be discussed in terms of the diffusion of services.
    Date: 2017
  12. By: Atsushi Samitsu (Bank of Japan)
    Abstract: P2P lending is direct lending between lenders and borrowers online without using traditional financial intermediaries such as banks. There has been a rapid increase in the amount of outstanding loans in P2P lending in recent years, mainly in the UK, the US, and China, since a major P2P lending platform in the UK was launched in 2005. In this paper, the structure of P2P lending and its characteristics are analysed using banks as a reference point. This paper also highlights the fact that the legal arrangements in P2P lending vary from country to country and those differences could affect the degree of investor protection. Samitsu (2017) explains that under the current legal arrangement in Japan, investors assume the credit risk of P2P lending platforms, and proposes utilising schemes such as specific purpose companies and specific trust companies to strengthen investor protection.
    Keywords: P2P lending; Financial intermediation; Banks; Systemic risk; Investor protection; FinTech
    JEL: K22
    Date: 2017–10–23
  13. By: Lindeberg, Fredrik
    Abstract: This text is a working paper on the social resilience of the Internet, which means who can change how we do end-to-end best effort digital communication and how can they change it. I assume a bottom up organized version of the Internet and focus on the Internet itself. The texts goes through varying factors capable of through social means changing what the Internet is through intention or error, and concludes that a changing world order has the greatest impact on what the Internet will be in the future.
    Date: 2017
  14. By: Fukunari Kimura (Economic Research Institute for ASEAN and East Asia (ERIA)); Lurong Chen (Economic Research Institute for ASEAN and East Asia (ERIA))
    Abstract: The development of cross-border electronic commerce (e-commerce) is changing the world's economic landscape. To better grasp the opportunities of this global trend of growth, Asian countries will still need to make progress in areas such as connectivity, services, rules and regulations, and labour skills. In addition to market mechanism that shall lead the transition, government policy can help the market maximize the advantage of information revolution, and avoid potential market failure. Asian countries may consider policy effort on promoting e-commerce from following aspects: (a) Enabling an e-commerce growth environment, (b) Improving connectivity, (c) Encouraging value-added services, (d) Accelerating rule-setting and regulatory harmonization, (e) Promoting Internet financial innovation, (f) Prioritizing the development of smartphone economy
    Date: 2017–02
  15. By: Liliana Rojas-Suarez (Center for Global Development); Lucía Pacheco (BBVA)
    Abstract: This paper constructs an index of regulatory quality for improving financial inclusion for the purpose of assessing and comparing the quality of rules and regulations in a sample of eight Latin American countries. The index comprises 11 regulatory practices classified into three categories: those that determine the overall quality of the financial environment where providers of financial services that meet the needs of the poor operate (the enablers); those that deal with specific types of market frictions and regulate the provision of specific financial products and services (the promoters) to large segments of the population; and those that, albeit unintentionally, create distortions and barriers that adversely affect financial inclusion (the preventers). An important novelty of the index is that the assessment of individual regulatory practices not only takes into account accepted standards, but also recognizes that there are important interactions between regulations for financial inclusion as well as between these regulations and other type of government interventions. Among the countries in the sample, by mid-2017, Peru ranked first in this index, followed closely by Mexico. Chile, Colombia, Paraguay, and Uruguay obtained lukewarm results, although there were wide differences among these countries’ individual results. Argentina and Brazil were the two countries with the lowest overall scores. An additional contribution of the paper is that, throughout the analysis, countries’ specific areas of strengths and weakness in financial regulatory practices for improving financial inclusion are identified.
    Keywords: financial inclusion, financial regulation, Latin America
    JEL: G21 G22 G23 I25 K21 N26 O10
    Date: 2017–10–26
  16. By: de Streel, Alexandre; Sibony, Anne-Lise
    Abstract: This CERRE Policy Report makes recommendations, on the basis of the most recent academic literature, to improve EU consumer protection rules for digital services. Digital services are defined broadly and cover the main current legal categories, i.e. the information society services, the provision of digital content, the electronic communications service and the audiovisual media services. The Report deals with the horizontal consumer protection rules which have just be evaluated by the European Commission as well as sector-specific rules whose some are currently reviewed by the EU legislator.
    Date: 2017
  17. By: Fukunari Kimura (Economic Research Institute for ASEAN and East Asia (ERIA)); Lurong Chen (Economic Research Institute for ASEAN and East Asia (ERIA))
    Abstract: Cross-border e-commerce has been a major development trend of international trade and globalization. In the next 5-10 years, the top three fastest growing markets in the world-India, Indonesia, and Malaysia-will all come from Asia. Connectivity is the cornerstone of e-commerce development. E-commerce supporting connectivity aims to ease free information flow, logistics, free cash flow, and seamless links between the virtual and physical parts of e-commerce network. Accordingly, policy efforts include: (a) increasing the supply of public goods to improve connectivity infrastructure in both physical world and cyberspace, (b) establishing rules and regulations to ensure dynamics and competition of online market place, (c) improving connectivity-drived services to generate more value added, (d) prioritizing smartphone economy and Internet financial innovation, and, (e) collaboration in the region-wide e-commerce enabling environment
    Date: 2017–01
  18. By: Mamoon, Dawood
    Abstract: The paper analyses the opportunity cyber space and virtual technologies provide for improvement of lifestyles of rural and urban poor in developing countries. The paper floats the term ‘virtual tourism’ that suggests that developing countries can connect with each other and the developed world through world wide web and provide opportunities of cultural, economic and social exchange between populations through development and facilitation of locally developed virtual applications and technologies that has partly created the social media outlets like face book and Twitter and commerce spaces like Amazon and Ali Baba.
    Keywords: Information Technology, Sustainable Development, Virtual Tourism
    JEL: O33
    Date: 2017–10–18
  19. By: Jeremy Watson (Boston University Questrom School of Business, Department of Strategy and Innovation, 595 Commonwealth Avenue, Boston, MA 02215)
    Abstract: Digitization has drastically lowered the costs of replicating and distributing music, enabling piracy on the demand side, as well as supply side re-use and recontextualization. This paper examines cumulative creativity and re-use through the release of derivative works in the popular music industry. Combining novel data on "digital sampling" and cover songs with a new proprietary Spotify data-set tracking online music streaming, I study how the introduction of a derivative work impacts the market for the underlying good upon which it is based. With my data-set covering 11,682 artists and their daily streaming demand between 2015 and 2016, I utilize a matched-sample difference-in-differences estimator to find that, on average, re-use causes a 3% increase in demand for the treated artists. This effect is significantly mediated by prominence -- with the effect neutralized for highly prominent artists, while artists of low prominence have a larger 6% boost in listening. Novel re-uses of artists that have not been subject to extensive past re-use appear to have the largest effect, resulting in an average 15% increase in online streaming. These results highlight an advertising effect of re-use, suggest that derivative works have limited ex post competition with upstream works, and point toward the potential benefits of permissive intellectual property rights licensing.
    Keywords: copyright, intellectual property, digitization, cumulative innovation, technology strategy, content industries
    JEL: L24 O31 O34
    Date: 2017–10
  20. By: Konstantin Büchel; Maximilian von Ehrlich
    Abstract: Social interactions are considered pivotal to agglomeration economies. We explore a unique dataset on mobile phone calls to examine how distance and population density shape the structure of social interactions. Exploiting an exogenous change in travel times, we show that distance is highly detrimental to interpersonal exchange. Despite distance-related costs, we find no evidence that urban residents benefit from larger networks when spatial sorting is accounted for. Higher density rather generates a more efficient network in terms of matching and clustering. These differences in network structure capitalize into land prices, corroborating the hypothesis that agglomeration economies operate via network efficiency.
    Keywords: social interactions, agglomeration externalities, network analysis, spatial sorting
    JEL: R10 R23 D83 D85 Z13
    Date: 2017
  21. By: Dhammika Dharmapala; Vikramaditya Khanna
    Abstract: On November 8, 2016, the Indian government made a surprise announcement that certain currency notes (representing 86% of the currency then in circulation) would no longer be legal tender (although they could be deposited in banks over a limited period). The stated reason for this sudden “demonetization” was to combat tax evasion and corruption associated with “unaccounted-for” cash. We compute abnormal returns for firms on the Indian stock market around this event, and compare patterns of abnormal returns for different subsamples of firms defined by industry, ownership structure, and other characteristics. There is little evidence that sectors thought to be associated with greater tax evasion or corruption experienced significantly different returns. However, we find substantial positive returns for banks and for state owned enterprises (SOEs), implying market expectations that are puzzling in some respects, especially as the initial reactions do not show any evidence of reversal in the five months following the event. The bank results appear to indicate a market expectation of a persistent increase in financial depth. We also find a pattern of higher returns for industries that are characterized by a greater dependence on external finance, possibly suggesting an expectation of an easing of financial constraints. The returns for SOEs may be due to possible indirect effects of the announcement on perceptions of future corruption among these firms.
    Keywords: corruption, tax evasion, demonetization, financial constraints, India
    JEL: E42 H26
    Date: 2017
  22. By: Kapatamoyo, Musonda
    Date: 2017
  23. By: Lars Hornuf; Matthias Schmitt
    Abstract: Today, start-ups often obtain financing via the Internet through many small contributions of non-sophisticated investors. Yet little is known about whether these start-ups can ultimately build enduring businesses. In this paper, we hand-collected data from 38 different equity crowdfunding (ECF) portals and 656 firms that ran at least one successful ECF campaign in Germany or the United Kingdom. The evidence shows that German firms that receive ECF stand a higher chance of obtaining follow-up funding through business angels or venture capitalists and have a relatively lower likelihood to survive. We find firm age, the average age of the management team, and excessive funding during the ECF campaign all have a negative effect on firms’ likelihood to obtain post-campaign financing. By contrast, the number of senior managers, registered trademarks, subsequent successful ECF campaigns, crowd exits, and the amount of the funding target all have a positive impact. Subsequent successful ECF campaigns, crowd exits, and the number of venture capital investors are significant predictors reducing firm failure. Finally, we find that some of these factors have a differential impact for Germany and the United Kingdom.
    Keywords: equity crowdfunding, follow-up funding, firm survival
    JEL: G24 M13
    Date: 2017
  24. By: Barnett, William; Su, Liting
    Abstract: A monetary-production model of financial firms is employed to investigate supply-side monetary aggregation, augmented to include credit card transaction services. Financial firms are conceived to produce monetary and credit card transaction services as outputs through financial intermediation. While credit cards provide transactions services, credit cards have never been included into measures of the money supply. The reason is accounting conventions, which do not permit adding liabilities to assets. However, index number theory measures service flows and is based on microeconomic aggregation theory, not accounting. Barnett, Chauvet, Leiva-Leon, and Su (2016) have derived and applied the relevant aggregation theory applicable to measuring the demand for the joint services of money and credit cards. But because of the existence of required reserves and differences in taxation on the demand and supply side, there is a regulatory wedge between the demand and supply of monetary services. We derive theory needed to measure the supply of the joint services of credit cards and money, to estimate the output supply function, and to compute value added. The resulting model can be used to investigate the transmission mechanism of monetary policy. Earlier results on the monetary policy transmission mechanism based on the correlation between simple sum inside money and final targets are not likely to approximate or even be relevant to results that can be acquired by empirical implementation of this model or its extensions. Our financial-firm value-added measure and its supply function are fundamentally different from prior measures of inside money, shadow banking output, or money supply functions. The data needed for empirical implementation of our theory are available online from the Center for Financial Stability (CFS) in New York City. We show that the now discredited conventional accounting-based measures of privately produced inside money can be replaced by our measures, based on microeconomic aggregation theory, to provide the information originally contemplated in the literature on monetary theory for over a century.
    Keywords: Inside money, aggregation theory, index number theory, financial firm production
    JEL: C5 C58 D2 D22 E4 E41 G2 G21
    Date: 2017–10–18
  25. By: Nakamura, Akihiro
    Date: 2017
  26. By: Gokhan Guven; Eren Inci; Antonio Russo
    Abstract: We study a platform’s design of membership and transaction fees when sellers compete and buyers cannot observe the prices and features of goods without incurring search costs. The platform alleviates sellers’ competition by charging them transaction fees that increase with sales revenue, and extracts surplus via membership fees. It prices consumers’ membership below its cost to encourage their search. Examples include malls and online marketplaces. Most malls do not charge for parking while most lease contracts include percentage rents as well as fixed rents. Online marketplaces charge sellers for membership and per transaction while letting consumers access website for free.
    Keywords: consumer search, membership fees, retail agglomeration, transaction fees, two-sided platforms
    JEL: D21 D40 D83 L13 R33
    Date: 2017
  27. By: Matthew Ellman (Institute of Economic Analysis, IAE-CSIC, and Barcelona GSE)
    Abstract: Online social networks (OSN) influence the transmission of information in society. This paper analyzes how a profit-motivated OSN designs the instant feedback options, such as “likes†or up-votes and down-votes or disapprovals, that it aggregates into user ratings, and how these design choices affect social and economic outcomes. The OSN seeks to maximize advertising revenues via maximal engagement. We compare OSN designs that allow users to only up-vote other users' content contributions or “posts†against OSN designs that allow both up and down votes. Users care about what others think of them. The feedback system mediates what users with imperfect private signals learn about each others' contributions and about each other. The OSN design affects both the expected social approval gains from engaging as a contributor and the value to users from engaging as viewers of others' content. Up and down votes improve viewers information but removing the down-vote option can raise user willingness to contribute content by reducing the threat of unambiguous disapproval. We investigate a full set of OSN designs in a range of social contexts.
    Keywords: Online social networks, feedback design, user-generated content, quality, rating systems, platform economics, media economics.
    JEL: L13 L82
    Date: 2017–10
  28. By: Suzanne Jones and Tony Hooper
    Abstract: The global financial crisis of 2007–08 encouraged governments to exploit information and communication technologies. The New Zealand government responded by developing an Information and Technology Strategy to 2017. This investigation surveyed middle managers awareness of the Strategy, the level of collaboration and innovation they engaged in and what they considered the barriers and enablers to be. These data were triangulated with the perceptions of senior public officials. While there was a disconnect between what senior managers expected of middle managers and how middle managers perceived their role and responsibilities, there was agreement among senior and middle managers on the barriers to innovation based on agency responsibilities and priorities. Ingrained corporate behavior has incentivised low risk, stable, reliable and accountable staff, while risk taking and entrepreneurial capabilities have not been rewarded. The Strategy was revised and simplified, and senior manager views gathered again to see if their initial perceptions had changed.
    Keywords: innovation, collaboration, public sector, information and communication technology, middle managers
  29. By: Paul, J.; Agatz, N.A.H.; Spliet, R.; de Koster, M.B.M.
    Abstract: In this paper, we study a setting in which a carrier can satisfy customer delivery requests directly or outsource them to another carrier. A request can be outsourced to a carrier that is already scheduled to visit the corresponding customer, if capacity allows. For the customers that receive their deliveries directly, we make a vehicle routing schedule that minimizes transportation costs, while for the outsourced customers we incur additional transfer costs between the carriers. This study is motivated by a collaboration with an omni-channel grocery retailer for which goods that are ordered online can be picked up from the stores. The goal is to save costs by consolidating the supply of pick-up points with the store inventory replenishment. To solve this problem, we present exact and heuristic approaches. Computational experiments on both the real-world grocery retail case and artificial instances show that substantial savings can be achieved.
    Keywords: Consolidation, Omni-channel retailing, Vehicle routing problem, Local Search
    Date: 2017–10–19
  30. By: Bruno S. Frey
    Abstract: The digital revolution has led to a quantification of ever more areas of human life and society. At the same time, there is an explosion of the number of awards, which by their very nature are based on non-quantified performance. Will quantification take over completely, leading to “omnimetrics†? The paper argues that this will not be the case. An economic explanation for the paradoxical existence of two totally different developments is offered: The value of awards is the higher, the stronger is the effort to quantify. The two developments depend on each other. The more digitalized the world is, the more non-quantified and non-quantifiable aspects of life are cherished. The quantification mania not only raises the value of awards but also the importance of personal relationships, of friendship, love and admiration. While digitalization will proceed and will determine increasingly larger parts of our lives, it is hypothesized that the non-quantified aspects of life will not disappear but flourish.
    Keywords: awards, digital world, quantification, rankings, ratings, intrinsic motivation
    JEL: A13 C80 D46 D80 Z10
    Date: 2017
  31. By: Cherry, Barbara A.
    Date: 2017
  32. By: David Schwegman (Center for Policy Research, Maxwell School, Syracuse University, 426 Eggers Hall, Syracuse, NY 13244)
    Abstract: As of 2017, no federal law protected Gay, Lesbian, Bisexual, Transgender, and Queer (LGBTQ) individuals from housing discrimination. However, 22 U.S. states and over 200 municipalities have passed laws prohibiting housing discrimination based on sexual orientation. In this paper, I present the results of a randomized pair-email correspondence audit of 6,490 property owners in 94 U.S. cities. I provide a nationally-representative estimate of the level of discrimination same-sex couples experience when inquiring about rental housing. I find that same-sex male couples, especially Black same-sex male couples, are less likely to receive a response to inquiries about rental units. Same-sex female couples receive preferential treatment compared to heterosexual couples. I then examine how state and local anti-discrimination laws covary with rates of housing discrimination against same-sex couples. Compare to localities without any housing protections, I find that response rates covary positively with statelevel protections but negatively with local-level protections. I conclude by testing several hypotheses about the causes of this discrimination. This preliminary evidence suggests that property owners are willfully discriminating against same-sex male couples.
    Keywords: LGBTQ Discrimination, Same-Sex Households, Housing Audits, State and Local Laws, Rental Market Discrimination
    JEL: J15 J18 R21
    Date: 2017–10
  33. By: Daniel Goetz (Rotman School of Management, 105 St. George St., Toronto, ON, Canada M5S 3E6)
    Abstract: This paper examines the effect of competition on product quality when product quality is unobserved before purchase. Using a dataset that records the actual broadband internet speed consumers receive as well as the speed the provider claims is being delivered, I find that an additional broadband competitor raises the ratio of actual to claimed speeds for incumbents by between 23 and 32 percent within the first 6 months, but that this effect attenuates after 18 months. This increase is due to improvements in the actual speed, and not just reductions in the claimed speed. I recover the causal effect of competition on product misrepresentation by leveraging the launch of a broadband-capable satellite in mid-2012 and exploiting exogenous variation in the suitability for satellite internet across U.S. counties. I provide suggestive evidence that the reduction in firms’ strategic misrepresentation of their products led to reduced misallocation of consumers across internet plans.
    Keywords: broadband access; market structure; quality disclosure
    JEL: L96 L11 L15
    Date: 2017–09
  34. By: Egbert, Henrik
    Abstract: This paper addresses the participative pricing mechanism of Pay-What-You-Want pricing as related to Marcel Mauss’s concept of the Gift. Reciprocity is a behavioural pattern imminent to the Gift as well as to Pay-What-You-Want pricing. The paper refers to results from behavioural economics in order to identify factors that positively influence reciprocity. It is argued that the aspects elaborated on in the Gift are also relevant to the PWYW pricing mechanism when it comes to implementations of the latter as one of the corporate pricing strategies.
    Keywords: Gift, Marcel Mauss, Pay-What-You-Want, PWYW, Pricing, Reciprocity
    JEL: M21 Z13
    Date: 2017–10–01

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.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.