nep-pay New Economics Papers
on Payment Systems and Financial Technology
Issue of 2018‒01‒01
sixteen papers chosen by
Bernardo Bátiz-Lazo
Bangor University

  1. A four-factor framework of consumers' perception of mobile applications in context By Buck, Christoph; Horbel, Chris; Kessler, Tim
  2. Do social networks shape the geography of crowdfunding? By Sylvain Dejean
  3. The experience matters. Participation-related rewards increase the success chances of crowdfunding campaigns By Regner, T.; Crosetto, P.
  4. Digital Challenges for the Welfare State By Eichhorst, Werner; Rinne, Ulf
  5. Priming app information privacy concerns in mobile ecosystems By Buck, Christoph; Burster, Simone; Eymann, Torsten
  6. The digital turn in political representation in China By Heberer, Thomas; Shpakovskaya, Anna
  7. Broadband Internet and Income Inequality By Georges Vivien Houngbonon; Julienne Liang
  8. The Digital Economy, New Products and Consumer Welfare By Diewert, Erwin; FOX, Kevin J. Fox; SCHREYER, Paul
  9. Physical distance and cooperativeness towards strangers By Kühl, Leonie; Szech, Nora
  10. Flexible Microfinance Products for Financial Management by the Poor: Evidence from SafeSave By Carolina Laureti; Alain De Janvry; Elisabeth Sadoulet
  11. Modelling Crypto-Currencies Financial Time-Series By Leopoldo Catania; Stefano Grassi
  12. The Effect of ICT on Supply Chains of Emerging Markets By Ira Haavisto; Alain Vaillancourt
  13. Memory and Markets By Sergei Kovbasyuk; Giancarlo Spagnolo
  14. Transcript of Moderated Conversation at UC Berkeley Event, US Economy: 10 Years after the Crisis: November 27, 2017 By Dudley, William
  15. Transcript of Fireside Chat at Rutgers University—New Brunswick: November 29, 2017 By Dudley, William
  16. Price Differentiation between On-Net and Off-Net Calls: An Application to the Chilean Telephony Market By Claudio Agostini; Raul Lazcano; Eduardo Saavedra; Manuel Willington

  1. By: Buck, Christoph; Horbel, Chris; Kessler, Tim
    Abstract: Mobile applications are not only integral to the functioning of smart mobile devices (SMD) but also one of the most commonly used technological interfaces within smart networks of connected devices. In order to market these value propositions, companies have to understand how consumers perceive apps in order to present an interface that is well received and allows for the highest benefits for companies and customers alike. From a technical perspective, apps are complex software products, but consumers do not seem to perceive them as such, because they see apps through the "lens" of context. Thus, the context in which apps and associated services are purchased and used considerably influences the way consumers interpret apps and derive val-ue from them. Therefore, this article sheds light on consumers' perception of apps and the role of context in shaping this perception. Based on Yoo's (2010) framework of experiential computing, we develop a framework in which context is structured into four dimensions: personal, technical, functional and social. The framework can be used to get a better understanding of consumers' app perception and related experience and to successfully develop and market apps, provide smart services based on adequate information systems, design app stores, or regulate the legal environment. Moreover, the framework can be applied to other mobile or digital offerings and serve for a better understanding of the perception of value propositions like smart services and devices.
    Keywords: Mobile Applications,Experiential Computing,Context,Perception,Consumer Behavior
    Date: 2017
  2. By: Sylvain Dejean (CEREGE - Centre de Recherche en sciences de Gestion - EA 1722 - La Rochelle - ULR - Université de La Rochelle)
    Abstract: Does the distance still matters in a context where digital technologies promised to eliminate distance-related costs? In crowdfunding platforms, the founder of a project and the backers mainly exchange tacit information (trustworthiness and seriousness of the founder, feasibility of a project), challenging the ability of the Internet to abolish the cost of distance. We investigate how the existence of social ties between two geographical areas, by lowering the asymmetry of information, can shape the flow of funding in a given country. We take advantage of a unique database provided by the French leader of reward-based Crowdfunding. With a dataset containing 12887 projects and 452 850 contributions representing a value of 19 million euros over the period 2012/2015, we estimate, for each pair of the 94 French regions, the number and the amount of bilateral funding as well as their determinants in a gravity-like equation model. To account for the existence of social ties between French regions we exploit information of the French national Census of 2013 about regional migration. Our mains results are first that the elasticity of distance is still important (around 0.5) in the context of reward-based crowdfunding platforms. We then show that taking into account the existence of social ties between regions strongly reduces and even annihilates (under some specifications) the impact of distance. This result suggests that if digital technology could have reduced the geographical distance, only social proximity seems able to decrease the information-related costs.
    Keywords: Crowdfunding,economic geography,gravity,social networks
    Date: 2017–11–22
  3. By: Regner, T.; Crosetto, P.
    Abstract: Crowdfunding recently emerged as an alternative funding channel for start-ups, creative artists and social endeavors. On specialized web platforms, project creators ask the crowd for support and provide in return a set of rewards, modulated according to the amount of support pledged. Our study investigates the role of self- and social-image enhancing rewards in determining project success. Using data from 346 projects hosted by Startnext, the biggest crowdfunding platform in Germany, we show that providing higher shares of reward levels that let pledgers participate in and experience the project is correlated with project success.
    JEL: L26 D03 G32
    Date: 2017
  4. By: Eichhorst, Werner (IZA); Rinne, Ulf (IZA)
    Abstract: Digitalization is the buzzword under which profound changes of the labor market can be summarized. Next to automation, i.e., the increasing use of robots, "intelligent" machines and more comprehensive algorithms that is no longer restricted to routine tasks, especially the emerging platform economy may pose significant "digital challenges" for the welfare state. This article sheds light on the potentially eroding foundations of the welfare state, it discusses tools for combating a potential digital divide on the individual level, and it proposes a new institutional perspective on firms, workers, and the welfare state.
    Keywords: digitalization, robots, automation, future of work, industry 4.0, technological change, platform economy, welfare state
    JEL: J08 J24 O33 O38
    Date: 2017–11
  5. By: Buck, Christoph; Burster, Simone; Eymann, Torsten
    Abstract: In the course of experiential computing privacy is entering personal space. Due to the implementation of all kinds of sensors and computing in everyday life of users, their privacy is at high risk. The high risk of privacy is strengthened by the classification of mobile app download decisions in mobile ecosystems as low effort processes. The article follows the call of Dinev et al. (2015) to investigate the influences of behavioral economics on privacy decisions. The paper provides the development of an app information privacy concern and six independent experiments in the field of priming information privacy with altogether 1954 participants. The results support the assumption of app decision-making as low effort process and indicate the influence of priming on individuals' information privacy concerns. This research contributes to increasing importance of understanding individuals' behavior in digital ecosystems.
    Keywords: Mobile Applications,Information Privacy,Privacy Concerns,Behavioral Economics,Priming
    Date: 2017
  6. By: Heberer, Thomas; Shpakovskaya, Anna
    Abstract: This paper provides a literature review and preliminary field observations on the topic of political representation in the Chinese cyberspace. The authors demonstrate that multiple new communication platforms are being established in the Chinese cyberspace. These new platforms not only transform conventional forms of political representation but also create new representative patterns, such as in cases of interactive and connective e-representations. They conclude that the proliferation of new communication technologies has been transforming the relationships between representatives and represented as well as between the state and society. Furthermore, in this paper the authors take their analysis beyond the description of the Chinese case and argue that the Chinese case also contributes to the Western theory of political representation. More specifically, they question the performative nature of claim-making and the role of "performer" and the "audience". They propose two concepts of interactive and connective e-representations and further claim that the current developments in the Chinese cyberspace may signal a new digital turn in the theory of political representation.
    Keywords: political representation,e-representation,cyberspace,representative claim-making,interactive andconnective e-representations,opinion leaders,entrepreneurs
    Date: 2017
  7. By: Georges Vivien Houngbonon (LGI - Laboratoire de Genie Industriel - CentraleSupélec); Julienne Liang (France Télécom)
    Abstract: Policy makers are aiming for a large coverage of high-speed broadband Internet. However , there is still a lack of evidence about its effects on income distribution. In this paper, we investigate the effects of fixed broadband Internet on mean income and income inequality using a unique town-level data on broadband adoption and quality in France. We find that broadband adoption and quality raise mean income and lower income inequality. These results are robust to initial conditions, and yield policy implications for the deployment of faster broadband Internet.
    Keywords: Broadband Internet,Income Inequality,Telecommunications
    Date: 2017–12–01
  8. By: Diewert, Erwin; FOX, Kevin J. Fox; SCHREYER, Paul
    Abstract: Benefits of the Digital Economy are evident in everyday life, but there are significant concerns that these benefits may not be appropriately reflected in official statistics. Statistical agencies are typically unable to measure the benefits that result from introduction of such new goods and services. The measurement of the net benefits of new and disappearing products depends on what type of index the statistical agency is using to deflate final demand aggregates. We examine this measurement problem when the agency uses any standard price index formula for its deflation of the value aggregate, such as GDP. An Appendix applies the methodology to the problem of measuring the effects of product substitutions for disappearing items.
    Keywords: Maximum overlap indexes, Hicksian reservation prices, Laspeyres, Paasche, Fisher and Törnqvist price indexes
    JEL: C43 D11 D60 E01 E31 O31 O47
    Date: 2017–12–14
  9. By: Kühl, Leonie; Szech, Nora
    Abstract: Cooperativeness among genetically unrelated humans remains a major puzzle in the social sciences. We explore the causal impact of physical distance on willingness to help. In a field setting, participants decide about supporting local refugees at the dispense of money to themselves. We vary physical distance only, and keep other factors such as cultural distance fixed. The data shows that an increase in local physical distance decreases willingness to donate. A laboratory experiment confirms this finding. We further explore the causal roles of exposure (in the field) and of larger distances (in the lab) with a total of 475 participants.
    Date: 2017
  10. By: Carolina Laureti; Alain De Janvry; Elisabeth Sadoulet
    Abstract: Well-functioning financial services are key for consumption smoothing and to take advantage of investment opportunities. Even though poor households badly need financial services for their day-to-day money management, a commonly held view is that they are ‘too poor’ to save and to repay loans with flexible terms. This paper explores whether this view holds true for two specific flexible financial products, namely passbook savings accounts and credit lines. Analyzing the daily transactions and balances in more than 10,000 SafeSave accounts—a microfinance institution based in Dhaka, Bangladesh—over nine years (2004-2012) shows that clients make extensive use of their flexible savings-and-loan accounts to accommodate changing availability of and needs for liquidity in the face of three kinds of events: paydays, Islamic festivals (Ramadan, Eid al-Fitr, and Eid al-Adha), and political protests (hartals). Cash-in (savings deposit and loan repayment) flexibility is used to cope with both positive (paydays) and negative shocks (Islamic festivals and political protests); cash-out (withdrawal and loan taken) flexibility is used if the negative shock is anticipated well in advance (as in the case of Islamic festivals). We show that, while interest rates on loans are higher than in competing MFIs, repayment rates are comparably high. We also show that SafeSave is covering its operational costs, indicating that this type of flexible financial services can be offered to the poor in a sustainable fashion. Overall, analysis of the SafeSave experience shows that flexible financial products are much in demand by the poor and that they can be profitable for the microfinance institution that offers them.
    Keywords: Bangladesh; liquidity; household finance; contract design
    JEL: D14 G21 O12
    Date: 2017–12–20
  11. By: Leopoldo Catania (DEF, University of Rome "Tor Vergata"); Stefano Grassi (DEF, University of Rome "Tor Vergata")
    Abstract: This paper studies the behaviour of crypto{currencies financial time{series of which Bitcoin is the most prominent example. The dynamic of those series is quite complex displaying extreme observations, asymmetries and several nonlinear characteristics which are difficult to model. We develop a new dynamic model able to account for long{memory and asymmetries in the volatility process as well as for the presence of time{varying skewness and kurtosis. The empirical application, carried out on a large set of crypto{currencies, shows evidence of long memory and leverage effect that has a substantial contribution in the volatility dynamic. Going forward, as this new and unexplored market will develop, our results will be important for investment and risk management purposes.
    Keywords: Crypto-currency; Bitcoin, Score{Driven model; Leverage effect; Long memory; Higher Order Moments
    JEL: C01 C22 C51 C58
    Date: 2017–12–11
  12. By: Ira Haavisto; Alain Vaillancourt
    Abstract: The purpose of this paper is to investigate the effects of ICT (information and communication technology) on the supply chain capacity of emerging markets. To achieve this we carry out a literature review to identify an empirically verifiable hypothesis before testing it with various indicators of ICT and logistics performance using regression analysis. We find that internet infrastructure and use has a positive impact on the Logistic Performance Index (LPI) while other ICT indicators linked to phone use do not have such a strong relationship with the LPIs. Although these findings are limited by the nature of the secondary data, this research offers relevant insight for managers and policy makers on understanding the link between ICT and supply chains to evaluate and improve supply chains in emerging market.
    Keywords: Supply chains,ICT,Emerging markets,
    Date: 2017–12–20
  13. By: Sergei Kovbasyuk (Einaudi Institute for Economics and Finance); Giancarlo Spagnolo (SITE-Stockholm School of Economics, EIEF, Tor Vergata & CEPR)
    Abstract: In many environments, including credit and online markets, past records about participants are collected, published, and erased after some time. We study the effects of erasing past records on trade and welfare in a dynamic market where each seller's quality follows a Markov process and buyers leave feedback about sellers. When the average quality of sellers is low, unlimited records always lead to a market breakdown. Appropriately deleting records, instead, can sustain trade in the long run. Positive and negative records play very different roles, and welfare is maximized for short positive records and long but bounded negative records.
    Keywords: Limited records, rating systems, credit registers, privacy, data retention, online reputation mechanisms, market experimentation
    JEL: D82 D53 G20 G28 K35 L14 L15
    Date: 2017–12–07
  14. By: Dudley, William (Federal Reserve Bank of New York)
    Abstract: Transcript of Moderated Conversation at UC Berkeley Event, US Economy: 10 Years after the Crisis: November 27, 2017.
    Keywords: liberal arts; Jerome Powell; dual mandate; University of California Berkeley; Basel; communication; taper tantrum; trade barriers; skills mismatch; tax code; minimum wage; median wage; Carla Hesse; ECB; Volcker rule; Crypto-currencies; over-the-counter derivatives
    Date: 2017–11–27
  15. By: Dudley, William (Federal Reserve Bank of New York)
    Abstract: Transcript of Fireside Chat at Rutgers University—New Brunswick: November 29, 2017.
    Keywords: income mobility; road trips; Charles Steindel; New Jersey; Eugene White; Board of Directors; bitcoin; Sweden; transportation; labor mobility; fiscal sustainability; normalization; Volcker rule; diversity; fintech
    Date: 2017–11–29
  16. By: Claudio Agostini (Escuela de Gobierno, Universidad Adolfo Ibáñez); Raul Lazcano; Eduardo Saavedra; Manuel Willington
    Date: 2016–06

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