nep-pay New Economics Papers
on Payment Systems and Financial Technology
Issue of 2018‒08‒20
twenty-six papers chosen by
Bernardo Bátiz-Lazo
Bangor University

  1. Reserves For All? Central Bank Digital Currency, Deposits, and their (Non)-Equivalence By Niepelt, Dirk
  2. Boosting productivity and preparing for the future of work in Germany By Naomitsu Yashiro; Stephanie Lehmann
  3. Female Economic Participation with Information and Communication Technology (ICT) Advancement: Evidence from Sub-Saharan Africa By Efobi, Uchenna; Tanankem, Belmondo; Asongu, Simplice
  4. Digital connectivity & e-commerce: Overview of financing flows and examples of aid for trade support By Mbise, Theo; Taal, Sainabou; Roberts, Michael; Lammersen, Frans
  5. Mapping the Privacy-Utility Tradeoff in Mobile Phone Data for Development By Alejandro Noriega-Campero; Alex Rutherford; Oren Lederman; Yves A. de Montjoye; Alex Pentland
  6. Incentive Compatibility on the Blockchain By Jonathan Chiu; Thorsten Koeppl
  7. Is Equity Crowdfunding a Good Tool for Social Enterprises? By Stefano Cosma; Alessandro G. Grasso; Francesco Pagliacci; Alessia Pedrazzoli
  8. The Sovereign Money Initiative in Switzerland: An Assessment By Philippe Bacchetta
  9. Characterizing Cryptocurrency market with Levy's stable distributions By Shinji Kakinaka; Ken Umeno
  10. Managing Competition on a Two-Sided Platform By Paul Belleflamme; Martin Peitz
  11. Data for Good: Unlocking Privately-Held Data to the Benefit of the Many By Alemanno, Alberto
  12. Airbnb in Paris : quel impact sur l'industrie hôtelière? By Ewen Gallic; Vincent Malardé
  13. Digital Governance in Developing Countries: Beneficiary Experience and Perceptions of System Reform in Rajasthan, India By Alan Gelb; Anit Mukherjee; Kyle Navis
  14. Trust in Lending By Richard T. Thakor; Robert C. Merton
  15. Sharing the liberal utopia. The case of Uber in France and the US By Gruszka, Katarzyna; Novy, Andreas
  16. Methods of nonlinear dynamics and the construction of cryptocurrency crisis phenomena precursors By Vladimir Soloviev; Andrey Belinskiy
  17. Shopping Mall Services and Customer Purchase Intention along with Demographics By Muhammad Soban Badar; Muhammad Irfan
  18. Evidence and Actions on Mortgage Market Disparities: Research, Fair lending Enforcement and Consumer Protection By Marsha J. Courchane; Stephen L. Ross
  19. Evidence and Actions on Mortgage Market Disparities: Research, Fair Lending Enforcement and Consumer Protection By Marsha J. Courchane; Stephen L. Ross
  20. Organizing Time Banks: Lessons from Matching Markets By Andersson, Tommy; Csehz, Ágnes; Ehlers , Lars; Erlanson, Albin
  21. Price wars in a highly concentrated industry: Mobile communication voice services By John Jairo García Rendón; Diego F. Linares
  22. Why Fintechs Cooperate with Banks - Evidence from Germany By Bömer, Max; Maxin, Hannes
  23. Artificial Intelligence, Economics, and Industrial Organization By Hal Varian
  24. Towards a Theory of Platform Dynamics By Cabral, Luís M B
  25. Entrepreneurship and information technology businesses in economic crisis By Syed Ali Abbas
  26. Expanding Access to Finance for Small-Scale Businesses By World Bank Group

  1. By: Niepelt, Dirk
    Abstract: I offer a macroeconomic perspective on the "Reserves for All" (RFA) proposal to let the general public use electronic central bank money. After distinguishing RFA from cryptocurrencies and relating the proposal to discussions about narrow banking and the abolition of cash I propose an equivalence result according to which a marginal substitution of outside for inside money does not affect macroeconomic outcomes. I identify key conditions on bank and government (central bank) incentives for equivalence and argue that these conditions likely are violated, implying that RFA would change macroeconomic outcomes. I also relate my analysis to common arguments in the discussion about RFA and point to inconsistencies and open questions.
    Keywords: CADcoin; CBDC; e-krona; e-Peso; Fedcoin; J Coin; narrow banking
    JEL: E42 E51 E58 E61 E63 H63
    Date: 2018–07
  2. By: Naomitsu Yashiro; Stephanie Lehmann
    Abstract: This paper reviews policies to strengthen Germany’s productivity growth and prepare for changes in labour markets brought about by new technologies. This paper also discusses how social protection and the bargaining framework should be reformed for the future of work. Germany enjoys a relatively high labour productivity level but productivity growth has been modest in recent years. There is room to boost productivity growth by accelerating the diffusion of new technologies throughout the economy. Vigorous entrepreneurship and innovation by small and medium enterprises are key for such technology diffusion while strong broadband and mobile networks widen the scope of data-intensive technologies that can be exploited to increase productivity. Widespread use of new technologies will bring about significant changes in skill demand and work arrangements. As in many countries, Germany saw a decline in the share of middle-skilled jobs in employment. A relatively high share of jobs is expected to be automated or undergo significant changes in task contents as a result of technological change. New technologies are also likely to increase individuals engaging in new forms of work, such as gig work intermediated by digital platforms. Such workers are less covered by public social safety nets such as unemployment insurance than regular employment.
    Keywords: automation, digital platform, entrepreneurship, Productivity, self-employment, technology diffusion
    JEL: J23 J24 J29 O33 O38 O43 O52
    Date: 2018–08–17
  3. By: Efobi, Uchenna; Tanankem, Belmondo; Asongu, Simplice
    Abstract: This study complements existing literature by investigating how the advancement in information and communication technology affects the formal economic participation of women. The focus is on 48 African countries for the period 1990-2014. The empirical evidence is based on Ordinary Least Squares, Fixed Effects and the Generalized Method of Moments regressions. The results show that improving communication technology increases female economic participation with the following consistent order of increasing magnitude: mobile phone penetration; internet penetration, and fixed broadband subscriptions. The findings are robust to the control for heterogeneities across countries. Policy implications are discussed.
    Keywords: Africa; Gender; ICT; Inclusive development; Technology
    JEL: G20 I10 I32 O40 O55
    Date: 2018–01
  4. By: Mbise, Theo; Taal, Sainabou; Roberts, Michael; Lammersen, Frans
    Abstract: Digital networks are an increasingly critical component of global trade. In 2017, the Global Review of Aid for Trade highlighted the importance of accessible and affordable connections for trade connectivity. Drawing extensively on information harvested in the Monitoring and Evaluation exercise in preparation for the Review, this paper analyses aid for trade for digital connectivity and e-commerce. Also presented in this paper are the types of issues and challenges faced in cross-border electronic transactions - an area in which demand for support is set to grow. The paper also surveys flows reported to the Organisation for Economic Cooperation and Development Creditor Reporting System. Funds disbursed to digital connectivity amounted to US$6.6 billion in concessional financing and US$8.3 billion in non-concessional financing in the period 2006-2016. The top providers of financing were the European Union, Japan, Korea, the United Kingdom and the World Bank Group. The paper also highlights the various methodological difficulties encountered, and explains the need to further refine reporting definitions so as to better capture financing flows to digital connectivity and to understand how aid for trade is being used to leverage private sector financing for ICT. The analysis concludes by reviewing the catalytic role that aid for trade is playing in mobilizing private sector financing. Research for the 2017 Global Review suggests that both developing countries and donors view ICT connectivity as an area where demand for financing will grow in future.
    Keywords: aid for trade,digital connectivity,ICT connectivity,e-commerce
    JEL: F35 P33 P45 L81 O33
    Date: 2018
  5. By: Alejandro Noriega-Campero; Alex Rutherford; Oren Lederman; Yves A. de Montjoye; Alex Pentland
    Abstract: Today's age of data holds high potential to enhance the way we pursue and monitor progress in the fields of development and humanitarian action. We study the relation between data utility and privacy risk in large-scale behavioral data, focusing on mobile phone metadata as paradigmatic domain. To measure utility, we survey experts about the value of mobile phone metadata at various spatial and temporal granularity levels. To measure privacy, we propose a formal and intuitive measure of reidentification risk$\unicode{x2014}$the information ratio$\unicode{x2014}$and compute it at each granularity level. Our results confirm the existence of a stark tradeoff between data utility and reidentifiability, where the most valuable datasets are also most prone to reidentification. When data is specified at ZIP-code and hourly levels, outside knowledge of only 7% of a person's data suffices for reidentification and retrieval of the remaining 93%. In contrast, in the least valuable dataset, specified at municipality and daily levels, reidentification requires on average outside knowledge of 51%, or 31 data points, of a person's data to retrieve the remaining 49%. Overall, our findings show that coarsening data directly erodes its value, and highlight the need for using data-coarsening, not as stand-alone mechanism, but in combination with data-sharing models that provide adjustable degrees of accountability and security.
    Date: 2018–08
  6. By: Jonathan Chiu; Thorsten Koeppl
    Abstract: A blockchain is a digital ledger that keeps track of a record of ownership without the need for a designated party to update and enforce changes to the record. The updating of the ledger is done directly by the users of the blockchain and is traditionally governed by a proof-of-work (PoW) protocol. We formalize this protocol as a Cournot game where users compete to update the blockchain for a reward. Cheating occurs in the form of “double spending” when users try to tamper with ownership records in order to defraud their counterparties. Ruling out incentives to cheat can be summarized in the form of a “no double-spending constraint.” These constraints put restrictions on the design of a blockchain and, thus, play a role akin to incentive compatibility constraints in classic mechanism design.
    Keywords: Digital Currencies, Economic models, Payment clearing and settlement systems
    JEL: G2 H4 P43
    Date: 2018
  7. By: Stefano Cosma; Alessandro G. Grasso; Francesco Pagliacci; Alessia Pedrazzoli
    Abstract: Equity crowdfunding is an emerging financing tool that can help social start-ups and firms to bring people and resources together around a project. This paper focuses on equity crowdfunding. We look at this as a complementary financing channel useful for promoting innovation and social change by paring down the traditional features of financial investment. Our unique dataset regards all the Italian Equity Crowdfunding campaigns launched by different platforms on the Italian equity crowdfunding market from 2013 to 2018. Our aim is twofold: a) to describe some characteristics of the Italian Equity crowdfunding market; b) to describe the characteristics of the social firms which have had recourse to equity crowdfunding, in order to investigate which factors influence the campaign’s success. The results suggest that social firms’ investment offerings are not different from those of non-social ones, but so far, the Italian equity crowdfunding market does not seem suitable for supporting the financial needs of this type of firm, on the side of either investors or firms.
    Keywords: equity crowdfunding; sustainability; social enterprises; entrepreneurial finance
    JEL: G23 G24
    Date: 2018–02
  8. By: Philippe Bacchetta (University of Lausanne, Swiss Finance Institute, and Centre for Economic Policy Research (CEPR))
    Abstract: The Sovereign Money Initiative will be submitted to the Swiss people in 2018. This paper reviews the arguments behind the initiative and discusses its potential impact. I argue that several arguments are inconsistent with empirical evidence or with economic logic. In particular, controlling sight deposits neither stabilizes credit nor avoids financial crises. Also, assuming that deposits at the central bank are not a liability has implications for fiscal and monetary policy; and Benes and Kumhof (2012) do not provide support for the reform as they do not analyze the proposed Swiss monetary reform and their closed-economy model does not fit the Swiss economy. Then, using a simple model with monpolistically competitive banks, the paper assesses quantitatively the impact of removing sight deposits from commercial banks balance sheets. Even though there is a gain for the state, the overall impact is negative, especially because depositors would face a negative return. Moreover, the initiative goes much beyond what would be the equivalent of full reserve requirement and would impose severe constraints on monetary policy; it would weaken financial stability rather then reinforce it; and it would threaten the trust in the Swiss monetary system. Finally, there is high uncertainty both on the details of the reform and on its impact.
    Date: 2017–08
  9. By: Shinji Kakinaka; Ken Umeno
    Abstract: Recent emergence of cryptocurrencies such as Bitcoin and Ethereum has posed possible alternatives to global payments as well as financial assets around the globe, so measuring their financial risk is crucial for investors and financial regulators. Analysis of price fluctuations in financial markets is often based on the assumption of a Gaussian distribution, which fails to capture the extreme values and leads to the underestimating of the risks. In this paper we first show that the behaviors of price fluctuations of cryptocurrencies can also be characterized by the fat-tail Levy's stable distribution by our parameter estimation method. After confirming that price returns of cryptocurrencies follow Levy's stable distribution, we discuss the recent market instability by focusing on one of the parameters of the distribution, which can characterize the fat-tailed behavior of cryptocurrency price returns. Our analysis shows that the fluctuations of estimated tail index parameter could be a candidate for the measure to capture extreme price behaviors of recently emerging cryptocurrencies and the tail index can be applicable for risk management and their financial modeling.
    Date: 2018–07
  10. By: Paul Belleflamme (AMSE - Aix-Marseille Sciences Economiques - EHESS - École des hautes études en sciences sociales - AMU - Aix Marseille Université - ECM - Ecole Centrale de Marseille - CNRS - Centre National de la Recherche Scientifique); Martin Peitz (Department of Economics and MaCCI, University of Mannheim)
    Abstract: On many two-sided platforms, users on one side not only care about user participation and usage levels on the other side, but they also care about participation and usage of fellow users on the same side. Most prominent is the degree of seller competition on a platform catering to buyers and sellers. In this paper, we address how seller competition affects platform pricing, product variety, and the number of platforms that carry trade.
    Keywords: network effects,two-sided markets,platform competition,intermediation,pricing,imperfect competition
    Date: 2018–06
  11. By: Alemanno, Alberto
    Abstract: It is almost a truism to argue that data holds a great promise of transformative resources for social good, by helping to address a complex range of societal issues, ranging from saving lives in the aftermath of a natural disaster to predicting teen suicides. Yet it is not public authorities who hold this real-time data, but private entities, such as mobile network operators and business card companies, and - with even greater detail - tech firms such as Google through its globally-dominant search engine, and, in particular, social media platforms, such as Facebook and Twitter. Besides a few isolated and self-proclaimed ‘data philanthropy’ initiatives and other corporate data-sharing collaborations, data-rich companies have historically shown resistance to not only share this data for the public good, but also to identify its inherent social, non-commercial benefit. How to explain to citizens across the world that their own data - which has been aggressively harvested over time - can’t be used, and not even in emergency situations? Responding to this unsettling question entails a fascinating research journey for anyone interested in how the promises of big data could deliver for society as a whole. In the absence of a plausible solution, the number of societal problems that won’t be solved unless firms like Facebook, Google and Apple start coughing up more data-based evidence will increase exponentially, as well as societal rejection of their underlying business models. This article identifies the major challenges of unlocking private-held data to the benefit of society and sketches a research agenda for scholars interested in collaborative and regulatory solutions aimed at unlocking privately-held data for good.
    Keywords: Big data; data; data governance; data sharing; data risk; data invisible; risk governance; philanthropy;
    JEL: I18 K23 K32 K40
    Date: 2018–06–11
  12. By: Ewen Gallic (CREM - Centre de recherche en économie et management - UNICAEN - Université de Caen Normandie - NU - Normandie Université - UR1 - Université de Rennes 1 - UNIV-RENNES - Université de Rennes - CNRS - Centre National de la Recherche Scientifique); Vincent Malardé (CREM - Centre de recherche en économie et management - UNICAEN - Université de Caen Normandie - NU - Normandie Université - UR1 - Université de Rennes 1 - UNIV-RENNES - Université de Rennes - CNRS - Centre National de la Recherche Scientifique)
    Abstract: In many cities around the world short-term housing platforms have become an alternative in the eyes of tourists. These new players, led by Airbnb, are disrupting the market, raising concerns from the hotel industry and public authorities. Using data from hotels and Airbnb in Paris, this paper proposes a new methodology for measuring the competitive pressure exerted by Airbnb on the hotel industry. The results indicate that an increase in the number of Airbnb hosts close to a hotel leads the hotel to reduce its price. This effect is amplified on weekend evenings.
    Abstract: Dans un grand nombre de villes à travers le monde, les plateformes de logement court terme sont devenues une alternative aux yeux des touristes. Ces nouveaux acteurs, Airbnb en tête, bouleversent le marché, suscitant des inquiétudes de la part de l'industrie hôtelière et des pouvoirs publics. En utilisant des données d'hôtels et d'Airbnb à Paris, cet article propose une nouvelle méthodologie pour mesurer la pression concurrentielle exercée par Airbnb sur l'industrie hôtelière. Les résultats indiquent qu'une augmentation du nombre d'offreurs Airbnb à proximité d'un hôtel conduit celui-ci à diminuer son prix. Cet effet est amplifié les soirs de week-end.
    Keywords: peer-to-peer platforms, hotel industry , Airbnb, competition , spatial statistics
    Date: 2018–07–09
  13. By: Alan Gelb (Center for Global Development); Anit Mukherjee (Center for Global Development); Kyle Navis (Center for Global Development)
    Abstract: India is at the forefront of the use of digital technology to transform the way in which citizens interact with states. This paper provides a picture of the perceived impact of digitization reforms in Rajasthan, based on a survey of beneficiaries of several benefit programs. We find that, on balance, the reforms appear to have improved perceptions of service delivery despite some difficulties during the digitization process and the possibility—which we cannot fully assess with our data—that there could have been some degree of exclusion. The proportion of people preferring the new systems, at 40–60 percent, far exceeded the proportion who expressed a preference for the old system (5–12 percent). In the case of food and cooking gas subsidy reforms, the reason for the preference is relatively clear—they considered that the new systems gave them greater control over their entitlements and reduced the ability of others to claim their benefits or divert them. The main problems arise from biometric authentication. Shifting pensions from postal delivery to bank deposits is overwhelmingly supported, partly because of better regularity. Reforms in Rajasthan also had two cross-cutting goals: financial inclusion and women’s empowerment. Our survey confirms that virtually all respondents have bank accounts, often two or more per family, as do all heads of household who are officially mandated to be women. Two thirds of these women had not owned bank accounts before the reforms. Mobiles emerge, however, as a male preserve. This suggests a further frontier for policies and programs to shift India towards a digital society—ensuring that all people have the capacity to access and to use digital technology.
    JEL: H10 H11 O10
    Date: 2018–07–10
  14. By: Richard T. Thakor; Robert C. Merton
    Abstract: We develop a theory of trust in lending, distinguishing between trust and reputation, and use it to analyze the competitive interactions between banks and non-bank lenders (fintech firms). Trust enables lenders to have assured access to financing, whereas a loss of investor trust makes this access conditional on market conditions and lender reputation. Banks endogenously have stronger incentives to maintain trust. When borrower defaults erode trust in lenders, banks are able to survive the erosion of trust when fintech lenders do not. Trust is also asymmetric in nature—it is more difficult to gain it than to lose it.
    JEL: E44 E51 E52 G21 G23 G28 H12 H81
    Date: 2018–06
  15. By: Gruszka, Katarzyna; Novy, Andreas
    Abstract: This article takes the case of Uber, a global platform specialized in transport technologies, to reappraise the claims of the sharing economy. The case presents a chronology of the struggles over the regulation of these digital markets in the US and France, using Uber's self-description and web discourse for additional illustrative purposes. It exposes Uber's business model, the key driving actors and their strategies as well as multi-scalar counter movements. The analysis is framed from a Hayekian and a Polanyian perspective, and the potential of the sharing economy to go beyond market fundamentalism. The Polanyian utopia of sharing as more than market relations based on self-interest is mobilized for legitimizing the platform. The Hayekian utopia of a market society which transforms social relations of friendship and community service into market activities is describing actual development. Finally, Polanyian "counter movements" are described and their potentials are discussed.
    Date: 2018
  16. By: Vladimir Soloviev; Andrey Belinskiy
    Abstract: This article demonstrates the possibility of constructing indicators of critical and crisis phenomena in the volatile market of cryptocurrency. For this purpose, the methods of the theory of complex systems such as recurrent analysis of dynamic systems and the calculation of permutation entropy are used. It is shown that it is possible to construct dynamic measures of complexity, both recurrent and entropy, which behave in a proper way during actual pre-crisis periods. This fact is used to build predictors of crisis phenomena on the example of the main five crises recorded in the time series of the key cryptocurrency bitcoin, the effectiveness of the proposed indicators-precursors of crises has been identified.
    Date: 2018–06
  17. By: Muhammad Soban Badar (Bahauddin Zakariya University - BZU (PAKISTAN) - Bahauddin Zakariya University - BZU (PAKISTAN)); Muhammad Irfan
    Abstract: Malls are continuously adopting the positive change and promoting the creativity in the people lifestyle. There are various determinants which help the customer on the selection of shopping mall. Important factors were studied to see the customer preference for the shopping mall with the help of the structured questionnaire. We collected the data from 416 random visitors through a survey. Data were analyzed using simple linear regression. The study will also help the shopping mall management to understand the customer likeness for the services. Future research can be directed toward the shopping mall purchase intentions and customer loyalty.
    Keywords: Customer Patronage,Shopping Mall Services,Motivations,Purchase Intention
    Date: 2018–07–15
  18. By: Marsha J. Courchane (CRA International); Stephen L. Ross (University of Connecticut)
    Abstract: In this article, we present overviews of the research on discrimination in mortgage underwriting and pricing, the experiences of minority borrowers prior to and during the financial crisis and federal efforts to mitigate foreclosures during the crisis. We next discuss the history of legal cases alleging disparate treatment of minority borrowers, and recent cases alleging disparate impact in the wake of the Supreme Court’s “Inclusive Communities” decision. Using these discussions as a background, we discuss and examine mortgage regulations issued by the Consumer Finance Protection Bureau following the financial crisis, describe recent developments in the FinTech industry discussing their implications for fair lending policy and minority borrowers more generally, and finally draw conclusions and make recommendations for improving the mortgage market outcomes of minority borrowers and increasing minority borrowers’ access to credit.
    Keywords: Fair Housing Act, Mortgage Discrimination, HMDA, Risk-based Pricing, Financial Crisis, Mortgage Foreclosure, Subprime Lending, HAMP, Legal Settlements, Disparate Impact, Inclusive Communities, Consumer Finance Protection Bureau, FinTech
    JEL: G01 G21 G23 G28 J15 J16 K23 L85 R30
    Date: 2018–08
  19. By: Marsha J. Courchane (Charles River Associates); Stephen L. Ross (University of Connecticut)
    Abstract: In this article, we present overviews of the research on discrimination in mortgage underwriting and pricing, the experiences of minority borrowers prior to and during the financial crisis and federal efforts to mitigate foreclosures during the crisis. We next discuss the history of legal cases alleging disparate treatment of minority borrowers, and recent cases alleging disparate impact in the wake of the Supreme Court’s “Inclusive Communities” decision. Using these discussions as a background, we discuss and examine mortgage regulations issued by the Consumer Finance Protection Bureau following the financial crisis, describe recent developments in the FinTech industry discussing their implications for fair lending policy and minority borrowers more generally, and finally draw conclusions and make recommendations for improving the mortgage market outcomes of minority borrowers and increasing minority borrowers’ access to credit.
    Keywords: Fair Housing Act, mortgage discrimination, HMDA, risk-based pricing, financial crises, mortgage foreclosure, subprime lending, HAMP, legal settlements, disparate impact, inclusive communities, Consumer Finance Protection Bureau, FinTech
    JEL: G01 G21 G23 G28 J15 J16 K23 L85 R30
    Date: 2018–08
  20. By: Andersson, Tommy (Department of Economics, Lund University); Csehz, Ágnes (Hungarian Academy of Sciences, Institute of Economics); Ehlers , Lars (Département de sciences économiques, Université de Montréal); Erlanson, Albin (Stockholm School of Economics, Department of Economics)
    Abstract: A time bank is a group of individuals and/or organizations in a local community that set up a common platform to trade services among themselves. There are several well-known problems associated with this type of banking, e.g., high overhead costs for record keeping and difficulties to identify feasible trades. This paper demonstrates that these problems can be solved by organizing time banks as a centralized matching market and, more specifically, by organizing trades based on a non-manipulable mechanism that selects an individually rational and time-balanced allocation which maximizes exchanges among the members of the time bank (and those allocations are efficient). Such a mechanism does not exist on the general preference domain but on a smaller yet natural domain where agents classify services as unacceptable and acceptable (and for those services agents have specific upper quotas representing their maximum needs). On the general preference domain, it is demonstrated that the proposed mechanism at least can prevent some groups of agents from manipulating the mechanism without dispensing individual rationality, efficiency, or time-balance.
    Keywords: market design; time banking; priority mechanism; non-manipulability
    JEL: D82
    Date: 2018–07–21
  21. By: John Jairo García Rendón; Diego F. Linares
    Abstract: This work focuses on the main variables that explain the prices of the voice services established by mobile service providers in Colombia. This will be done by analyzing different variables that characterize this sector, like, historical prices stablished by all operators, all the investments made in network development, market sharing and all the existing regulatory measures. We develop a model for data panels in the period between 2005 and 2011, which makes evident the existing interdependence amongst the different companies when setting rates. It is also evident the leadership of one of the competitors and the existing price war between providers.
    Keywords: Telecommunications, price wars, Investment, Regulation, Colombia
    JEL: D43 C23
    Date: 2018–07–30
  22. By: Bömer, Max; Maxin, Hannes
    Abstract: We developed a conceptual framework to explain why young financial technology companies (fintechs) seek to cooperate with incumbents from the finance sector. Examining 14 case studies on fintech-bank cooperation, we identified three main reasons: first, banks enable a fintech's market entry; second, banks increase a fintech's profits; and finally, banks enable new fintech products. We observed that each of these reasons is related to particular resources, which fintechs obtain through their cooperation partner. Additionally, we found that fintechs use different label approaches to sell their products when they cooperate with banks. Based on these results, we developed propositions that can be tested in future research.
    Keywords: Fintechs; Banks; Cooperation; Regulation, Reputation, Label
    JEL: G21 M13
    Date: 2018–08
  23. By: Hal Varian
    Abstract: Machine learning (ML) and artificial intelligence (AI) have been around for many years. However, in the last 5 years, remarkable progress has been made using multilayered neural networks in diverse areas such as image recognition, speech recognition, and machine translation. AI is a general purpose technology that is likely to impact many industries. In this chapter I consider how machine learning availability might affect the industrial organization of both firms that provide AI services and industries that adopt AI technology. My intent is not to provide an extensive overview of this rapidly-evolving area, but instead to provide a short summary of some of the forces at work and to describe some possible areas for future research.
    JEL: L0
    Date: 2018–07
  24. By: Cabral, Luís M B
    Abstract: I introduce a dynamic framework to analyze platforms. The (single) platform owner sets prices at the beginning of each period. Agents (buyers, sellers, readers, consumers, merchants, etc) make platform membership decisions occasionally. I show that optimal platform pricing addresses two externalities: across sides and across time periods. This results in optimal prices which depend on platform size in a non-trivial way. By means of numerical simulations, I examine the determinants of equilibrium platform size, showing that the stationary distribution of platform size may be bi-modal, that is, with some probability the platform remains very low or takes very long to increase in size. I also contrast the dynamics of proprietary vs non-proprietary (i.e., zero-priced) platforms; and consider the specific case of asymmetric platforms (one side cares about the other but not vice-versa).
    Date: 2018–07
  25. By: Syed Ali Abbas (Turiba University)
    Abstract: This paper aims to identify the importance of Information Technology businesses and youth's interest in entrepreneurial initiatives in connection with IT based businesses. The data was collected using questionnaire from final year students of entrepreneurship and computer sciences enrolled in Bachelors, so as to get a profound picture of their intention, motivation and ability to enter in IT related entrepreneurial ventures. As descriptive statistics was used to analyze the findings, the study depicts great motivation among final year graduates to enter in entrepreneurial ventures. They are found to be motivated to establish ventures of their own even at small level. Therefore, SMEs can play vital role in assisting and fostering entrepreneurial activity with special focus on Information Technology businesses. In addition, the research limitation could be the fact that data has been collected from top universities/ institutes in which intellect level of students is competitively high, thus their liking to entre and understanding regarding SMEs and entrepreneurial initiatives is better than students of ordinary institutes. Also, the results could have been deviated if same research was applied in countries with varying demographics. As for practical implementations, the research may be vital for SMEs officials to foresee the entrepreneurial spirit among youth and to design policies accordingly. Also, it opens horizons for information Technology students to consider entrepreneurial careers other than simply applying for jobs in software houses/ organizations. Also, no prior research has been carried out in analyzing the mutual relation of Entrepreneurship and Information Technology businesses, neither the outcome/ joint effect of both has been studied together.
    Keywords: entrepreneurship,information technology,innovation,economic crisis,Global Entrepreneurship Monitor
    Date: 2018
  26. By: World Bank Group
    Keywords: Finance and Financial Sector Development - Microfinance Finance and Financial Sector Development - Access to Finance Private Sector Development - Small and Medium Size Enterprises Finance and Financial Sector Development - Payment Systems & Infrastructure
    Date: 2017–01

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