nep-pay New Economics Papers
on Payment Systems and Financial Technology
Issue of 2019‒09‒30
thirty papers chosen by

  1. The ICO Paradox: Transactions Costs, Token Velocity, and Token Value By Richard Holden; Anup Malani
  2. Постинституциональная теория блокчейна: трансакционная ценность и ассамбляжи By Frolov, Daniil
  3. Digital service innovation enabled by the blockchain use in healthcare: the case of the allergic patients ledger By Rhode Ghislaine Nguewo Ngassam; Roxana Taddei; Isabelle Bourdon; Jorick Lartigau
  4. Digital innovation and Real estate appraisal By Agostino Valier; Ezio Micelli
  5. La technologie blockchain, alliée de la coopération au développement ? By Matthieu Boussichas; Vincent Nossek
  6. An ASEAN Digital Single Market: Boosting the Aspiration for a Single Market in the Digital Era By Paul John, Pena
  7. The Economics of Social Data: An Introduction By Dirk Bergemann; Alessandro Bonatti
  8. FinTech, BigTech, and the Future of Banks By Stulz, Rene M.
  9. Блокчейн и институциональная сложность: постинституционализм vs. неоинституционализм By Frolov, Daniil
  10. CW-REITS: A new asset class for the real estate industry? By Lucia Gibilaro; Gianluca Mattarocci
  11. Testing the Employment Impact of Automation, Robots and AI: A Survey and Some Methodological Issues By Barbieri, Laura; Mussida, Chiara; Piva, Mariacristina; Vivarelli, Marco
  12. It is not all benefits from Airbnb and room-sharing platforms: the problem and concerns of collaborative consumption and sharing economies By Tony ShunTe Yuo; Yu-An Yang
  13. Testing the employment and skill impact of new technologies: A survey and some methodological issues By Barbieri, Laura; Mussida, Chiara; Piva, Mariacristina; Vivarelli, Marco
  14. Quels impacts des règles relatives à la protection des données sur la concurrence entre plateformes infonuagiques, industrielles et immobilières? By Frédéric Marty
  15. Prices and Promotions in U.S. Retail Markets: Evidence from Big Data By Günter J. Hitsch; Ali Hortaçsu; Xiliang Lin
  16. What Are the Benefits of Data Sharing? Uniting Supply Chain and Platform Economy Perspectives By Huttunen, Henri; Seppälä, Timo; Lähteenmäki, Ilkka; Mattila, Juri
  17. Affective Portfolio Analysis: Risk, Ambiguity and (IR)rationality By Donald J. Brown
  18. World Innovation:Evidence from 100 years of Patent Data By Enrico Berkes; Kristina Manysheva; Marti Mestieri
  19. From Twitter to GDP: Estimating Economic Activity From Social Media By Indaco, Agustín
  20. Data Intermediaries and Selling Mechanisms for Customized Consumer Information * By David Bounie; Antoine Dubus; Patrick Waelbroeck
  21. Migration between platforms By Biglaiser, Gary; Crémer, Jacques; Veiga, André
  22. The Economics of Social Data By Dirk Bergemann; Alessandro Bonatti; Tan Gan
  23. State of the art in the use of emerging technologies in the public sector By Barbara Ubaldi; Enzo Maria Le Fevre; Elisa Petrucci; Pietro Marchionni; Claudio Biancalana; Nanni Hiltunen; Daniela Maria Intravaia; Chan Yang
  24. Automation probability within the German real estate industry due to digitalization: A calculation of the size of the job killer aspect of digitalization gilded with an optimistic outlook due to the job engine aspect By Daniel Piazolo
  25. A multivariate approach for the simultaneous modelling of market risk and credit risk for cryptocurrencies By Fantazzini, Dean; Zimin, Stephan
  26. What is the value of being a superhost? By Aleksander Berentsen; Christopher Waller; Mariana Rojas Breu
  27. Liquidity Effects of Unemployment Insurance Benefit Extensions: Evidence from Consumer Credit Data By Rene Chalom; Benjamin Pugsley; Fatih Karahan; Kurt Mitman
  28. Who Bears the Welfare Costs of Monopoly? The Case of the Credit Card Industry By Gajendran Raveendranathan; Kyle Herkenhoff
  29. Crime and Social Media By Simplice A. Asongu; Jacinta C. Nwachukwu; Stella-Maris I. Orim; Chris Pyke
  30. Education-occupation mismatch of migrants in the Italian labour market: the effect of social networks By Van Wolleghem, Pierre Georges; De Angelis, Marina; Scicchitano, Sergio

  1. By: Richard Holden; Anup Malani
    Abstract: Blockchain technology offers firms a novel method of raising capital, via so-called Initial Coin Offerings (ICOs). In the most novel form of an ICO, a firm creates digital assets called “utility tokens” that are tracked on a blockchain-based ledger; requires that its product be purchased only with those tokens; and then raises capital by selling these tokens to investors prior to creating any saleable product. We point out a fundamental paradox with the use of ICOs involving utility tokens. Requiring the use of utility tokens to purchase the firm's product increases the cost of that product by an amount proportional to the cost of running the blockchain that tracks the utility token. In order to increase product revenue—and thus capital raised via an ICO—the firm will want to reduce these blockchain-operating costs. Doing so, however, increases the number of utility-token transactions that take place in any time interval, i.e., increases token velocity and thus the effective supply of tokens. By Fisher's equation, this lowers the dollar value of tokens and thus the amount investors are willing to pay for them. This paradox limits the value of utility-token ICOs. We discuss alternatives to and variations of utility tokens that can mitigate the conundrum.
    JEL: G12 G32 L1 L11
    Date: 2019–09
  2. By: Frolov, Daniil
    Abstract: The paper on the example of blockchain demonstrates the possibilities of post-institutionalism – a new generation of institutional methodologies and theories, alternative to the new institutional economics. Based on the theory of transaction value, it has been proved that radical reduction of transaction costs by blockchain technologies will not lead to the elimination of intermediaries, but will redirect them to improving the quality of transactions and expanding the offer of additional (including hyperrelevant) transaction services. Using the theory of institutional assemblages, it is argued that it is impossible to form a homogeneous system of blockchain institutions based solely on the principles of decentralization, transparency and openness. The institutional system of blockchain will be organically hybrid, combining elements of opposing institutional logics – regulatory and algorithmic law, Ricardian and smart contracts, private and public systems, uncontrollability and arbitration. Thus, the conclusions of the neoinstitutional theory of blockchain (Davidson, De Filippi, Potts, 2018) are refuted from post-institutional positions.
    Keywords: blockchain; smart contracts; digital economy; transaction costs; transaction services; institutions; institutionalism
    JEL: B41 B52 O3
    Date: 2019–01–17
  3. By: Rhode Ghislaine Nguewo Ngassam (MRM - Montpellier Research in Management - UM1 - Université Montpellier 1 - UM3 - Université Paul-Valéry - Montpellier 3 - UM2 - Université Montpellier 2 - Sciences et Techniques - UPVD - Université de Perpignan Via Domitia - Groupe Sup de Co Montpellier (GSCM) - Montpellier Business School - UM - Université de Montpellier); Roxana Taddei (MRM - Montpellier Research in Management - UM1 - Université Montpellier 1 - UM3 - Université Paul-Valéry - Montpellier 3 - UM2 - Université Montpellier 2 - Sciences et Techniques - UPVD - Université de Perpignan Via Domitia - Groupe Sup de Co Montpellier (GSCM) - Montpellier Business School - UM - Université de Montpellier); Isabelle Bourdon (MRM - Montpellier Research in Management - UM1 - Université Montpellier 1 - UM3 - Université Paul-Valéry - Montpellier 3 - UM2 - Université Montpellier 2 - Sciences et Techniques - UPVD - Université de Perpignan Via Domitia - Groupe Sup de Co Montpellier (GSCM) - Montpellier Business School - UM - Université de Montpellier); Jorick Lartigau (HIT - Harbin Institute of Technology)
    Abstract: By combining the institutional approach and the rational model of digital innovation, there is increasingly a great interest in the implementation of blockchain solutions in healthcare but, until then concrete evidence for this type of project is missing. At the same time the healthcare sector, allergology in particular seems to face security (confidentiality, availability and integrity) issues and information audit trail weaknesses. For these reasons, our study focuses on the co-construction of a distributed ledger for patients allergies with healthcare professionals. The aim is to design and implement a reliable tool to deal with the availability , integrity and confidentiality of information about new allergies and distinguish between validated allergies and declarative allergies for the purpose of mitigating negative effects of unavailability of reliable information about patients allergies. This article defers the first step of our methodological cycle by explaining how collaboration is organized between Pikcio (blockchain technology provider) and allergists. As a result, we have first versions of some deliverables such as formal specifications, risk matrix document and a UML design (class diagram, use case diagram and sequence diagram) as the research project is iterative.
    Keywords: Allergology,pikciochain,blockchain,digital innovation,co-construction,social innovation
    Date: 2019–06–19
  4. By: Agostino Valier; Ezio Micelli
    Abstract: This research reviews the existing literature on the use of digital innovation in real estate valuation, focusing on three aspects.First, it analyses the factors that make the use of digital innovation increasingly relevant in the real estate sector and, more specifically, in the evaluation phase of assets. The need for innovation in the real estate market is highlighted, as the demand from investors for fast, reliable and objective appraisals.The second part reports the literature on digital innovations applied to valuation models, distinguishing between forecasting models for future market trends and assets-specific automated valuation models. This section focuses on the impact that new models have on the currently used approaches for value assessment.Third, the use of digital-based valuation models is investigated by analysing the context conditions. The review analyses the literature that correlates the reliability of the new models and the conditions of the real estate market in which they are used, especially in terms of information efficiency. Finally, the conclusions summarise the limits and potential of digital innovation in the field of valuation. Future directions are then identified.
    Keywords: Automated Valuation Models; Big data; Digital innovation; Forecasting analysis; proptech
    JEL: R3
    Date: 2019–01–01
  5. By: Matthieu Boussichas (FERDI - Fondation pour les Etudes et Recherches sur le Développement International); Vincent Nossek (FERDI - Fondation pour les Etudes et Recherches sur le Développement International)
    Abstract: L'évolution erratique de la monnaie Bitcoin a récemment jeté un coup de projecteur sur la technologie blockchain dont la célèbre cryptomonnaie est l'application la plus connue. Présentée comme une révolution disruptive par ses promoteurs, cette technologie permet la création de registres numériques infalsifiables, immuables et historicisés, et promet de pallier le déficit de confiance qui freine trop souvent les transactions. Cette note présente brièvement le concept de blockchain et en discute les implications en matière de coopération au développement.
    Keywords: Blockchain Technology
    Date: 2018–12–27
  6. By: Paul John, Pena
    Abstract: Advancements in information and communications technologies have changed the way individuals, firms, and nations create and exchange value across borders. Value comes in the form of goods, services, information, and data, but may also include talent, capital, ideas, and even culture. Southeast Asia is a thriving digital economy with the prospect of becoming a US$200B economy by 2025. However, new forms of protectionist measures arise, which may impede the free flow of value within the region. An aspirational digital single market concept and the changing dynamics of digital trade are explored. A digital economic integration framework that is interoperable, inclusive, and agile is proposed to address both barriers to the creation of an ASEAN digital single market. Requisite conditions for policy solutions are identified, and an empowered digital transformation board with the task of leading the change agenda is proposed as a critical governance enabler across the region.
    Keywords: ASEAN, digitalization, digital trade, digital transformation, regional integration, single market
    JEL: F15 L81 O33
    Date: 2019–08–13
  7. By: Dirk Bergemann (Cowles Foundation, Yale University); Alessandro Bonatti (MIT)
    Abstract: Large internet platforms collect data from individual users in almost every interaction on the internet. Whenever an individual browses a news website, searches for a medical term or for a travel recommendation, or simply checks the weather forecast on an app, that individual generates data. A central feature of the data collected from the individuals is its social aspect. Namely, the data captured from an individual user is not only informative about this speci?c individual, but also about users in some metric similar to the individual. Thus, the individual data is really social data. The social nature of the data generates an informational externality that we investigate in this note.
    Keywords: Individual Data, Social Data, Informational Externality, Internet Platforms, Data Collection, Data Markup
    JEL: D80 D82 D83
    Date: 2019–03
  8. By: Stulz, Rene M. (Ohio State University (OSU) - Department of Finance; National Bureau of Economic Research (NBER); European Corporate Governance Institute (ECGI))
    Abstract: Banks are unique in that they combine the production of liquid claims with loans. They can replicate most of what FinTech firms can do, but FinTech firms benefit from an uneven playing field in that they are less regulated than banks. The uneven playing field enables non-bank FinTech firms to challenge banks for specific products whose success is not tied to what makes banks unique, but they cannot replace banks as such. In contrast, BigTech firms have unique advantages that banks cannot easily replicate and therefore present a much stronger challenge to established banks in consumer finance and loans to small firms. Both Fintech and BigTech are contributing to a secular trend of banks losing their comparative advantage as they have less access to unique information about parties seeking credit.
    JEL: G21 G23 G24 G28
    Date: 2019–09
  9. By: Frolov, Daniil
    Abstract: From the point of view of modern neo-institutional economics, blockchain is an institutional technology that minimizes transaction costs and leads to the elimination of intermediation. Using the example of the blockchain, I demonstrate the possibilities of post-institutionalism – a new generation of methodologies and theories of institutional analysis, alternative to neo-institutional economics. Based on the theory of transaction value, I argue that the blockchain technologies will not radically reduce transaction costs, but will reorient intermediaries to improving the quality of transactions and expanding the offer of additional transaction services. Using the theory of institutional assemblages, I argue that it is impossible to form a homogeneous system of blockchain-based institutions associated exclusively with the principles of decentralization, transparency and openness. Blockchain-based institutions will be of a hybrid nature, combining elements of opposing institutional logics – regulatory and algorithmic law, Ricardian and smart contracts, private and public systems, uncontrollability and arbitration
    Keywords: institutions, institutional complexity, transactions, transaction costs, transaction value, post-institutionalism
    JEL: B4 B52 O3
    Date: 2019–07–30
  10. By: Lucia Gibilaro; Gianluca Mattarocci
    Abstract: REITs are currently evaluating the opportunity to collect resources for the real estate investment through equity crowdfunding solutions and the US is the main market in which REIT equity crowdfunding was adopted after the JOBS act, amending the Regulation A. The main advantage of the new real estate vehicle is the access to individuals with limited wealth that accept to invest in real estate investment vehicles not listed that are prevalently traded on line. The focus of the literature is prevalently on the cost savings offered by on line platforms that allow to achieve a net return of investment higher than other REITs due to the lower transaction costs that characterize the new asset class in the real estate industry.The analysis considers all the e-REITs incorporated in the time period 2015-2018, collects data about the Net Asset Value and the dividend payments with a quarterly frequency data, and compares the performance of e-REITs and other REITs in the three year time horizon. Results show that the performance of e-REITs is more stable over time even if the monthly return is significantly lower than other REITs. The lack of correlation between the performance achieved by this new type of REITs and traditional REITs demonstrates their usefulness for diversification purposes and different expected advantages for including the new asset class in a diversified portfolio of financial assets.
    Keywords: asset allocation; Crowdfunding; Performance; regulation; REIT
    JEL: R3
    Date: 2019–01–01
  11. By: Barbieri, Laura (Università Cattolica di Piacenza); Mussida, Chiara (Università Cattolica del Sacro Cuore); Piva, Mariacristina (Università Cattolica del Sacro Cuore); Vivarelli, Marco (Università Cattolica del Sacro Cuore)
    Abstract: The present technological revolution, characterized by the pervasive and growing presence of robots, automation, Artificial Intelligence and machine learning, is going to transform societies and economic systems. However, this is not the first technological revolution humankind has been facing, but it is probably the very first one with such an accelerated diffusion pace involving all the industrial sectors. Studying its mechanisms and consequences (will the world turn into a jobless society or not?), mainly considering the labor market dynamics, is a crucial matter. This paper aims at providing an updated picture of main empirical evidence on the relationship between new technologies and employment both in terms of overall consequences on the number of employees, tasks required, and wage/inequality effect.
    Keywords: technology, innovation, employment, skill, task, routine
    JEL: O33
    Date: 2019–09
  12. By: Tony ShunTe Yuo; Yu-An Yang
    Abstract: Sharing economy is so popular nowadays, it is regarded as a new way to generate evolutionary or even revolutionary business models. Owing to the rapid development of verifying, measuring and storing technologies, such as ICT, IoT, GPS, clouds, 5G and block chains, sharing economies have shown its potential in almost all fields: bikes, cars, rooms, logistics, energies, even finance and investments. Explicitly, these technologies seemed to be the solutions of resource indivisibility and free-rider effects, therefore sharing become applicable. Nevertheless, this research believes that sharing is not merely the problem of identifying and delineated the rights and obligations between sharing users. In other words, not all resources are suitable for sharing, especially the stakeholders of the subjects were multiple parties. This research focuses on the concerns of Airbnb-liked room-sharing platforms, collecting opinions from users, providers and the managerial authorities. The results show that sharing is indeed not all about benefits, but comes with all sorts of concerns, ranging from planning issues, devaluing the property value, privacy concerns, to personal safety worries. Another matter is the slow legislation process cannot cope with the rapidly evolving operational patterns in sharing economies. The managerial authorities even could not identify the essence of the problem in sharing to determine the legality of the business. This research suggests that regulating these sharing goods should go back to the fundamental characteristics and not all traditional or old fashion system should be contempt.
    Keywords: Free rider effect; Neighborhood externalities; Sharing Economy; Smart City; Tragedy of the Commons
    JEL: R3
    Date: 2019–01–01
  13. By: Barbieri, Laura; Mussida, Chiara; Piva, Mariacristina; Vivarelli, Marco
    Abstract: The present technological revolution, characterized by the pervasive and growing presence of robots, automation, Artificial Intelligence and machine learning, is going to transform societies and economic systems. However, this is not the first technological revolution humankind has been facing, but it is probably the very first one with such an accelerated diffusion pace involving all the industrial sectors. Studying its mechanisms and consequences (will the world turn into a jobless society or not?), mainly considering the labor market dynamics, is a crucial matter. This paper aims at providing an updated picture of main empirical evidence on the relationship between new technologies and employment both in terms of overall consequences on the number of employees, tasks required, and wage/inequality effect.
    Keywords: technology,innovation,employment,skill,task,routine
    JEL: O33
    Date: 2019
  14. By: Frédéric Marty (Université Côte d'Azur, France; GREDEG CNRS)
    Abstract: Le développement de l’économie des plateformes ne se limite plus aux services rendus à des consommateurs mais concerne également les services rendus à des acteurs industriels. Les services rendus en matière de stockage et de traitement des données par les plateformes infonuagiques ou la structuration de nouveaux processus productifs de type industrie 4.0 font écho à la constitution d’écosystèmes coopératifs et ouverts dans le secteur immobilier, lesquels sont favorisés par la numérisation des activités et le développement de l’internet des objets. Ce travail établit un parallèle entre ces différents types de plateformes et la numérisation du secteur immobilier. Il s’interroge sur les conditions de la coopération intra-plateforme et sur celle de la concurrence inter-plateformes, notamment en regard de la réglementation afférente à la protection des données personnelles mais aussi celle relative à la protection des communications électroniques et celle portant sur le secret des affaires.
    Keywords: plateformes électroniques, industrie 4.0, internet des objets, protection des données personnelles, concurrence, coopération, immobilier
    JEL: L23 L40 L85 L86
    Date: 2019–09
  15. By: Günter J. Hitsch; Ali Hortaçsu; Xiliang Lin
    Abstract: We document the degree of price dispersion and the similarities as well as differences in pricing and promotion strategies across stores in the U.S. retail (grocery) industry. Our analysis is based on “big data” that allow us to draw general conclusions based on the prices for close to 50,000 products (UPC’s) in 17,184 stores that belong to 81 different retail chains. Both at the national and local market level we find a substantial degree of price dispersion for UPC’s and brands at a given moment in time. We document that both persistent base price differences across stores and price promotions contribute to the overall price variance, and we provide a decomposition of the price variance into base price and promotion components. There is substantial heterogeneity in the degree of price dispersion across products. Some of this heterogeneity can be explained by the degree of product penetration (adoption by households) and the number of retail chains that carry a product at the market level. Prices and promotions are more homogenous at the retail chain than at the market level. In particular, within local markets, prices and promotions are substantially more similar within stores that belong to the same chain than across stores that belong to different chains. Furthermore, the incidence of price promotions is strongly coordinated within retail chains, both at the local market level and nationally. We present evidence, based on store-level demand estimates for 2,000 brands, that price elasticities and promotion effects at the local market level are substantially more similar within stores that belong to the same chain than across stores belonging to different retailers. Moreover, we find that retailers can not easily distinguish, in a statistical sense, among the price elasticities and promotion effects across stores using retailer-level data. Hence, the limited level of price discrimination across stores by retail chains likely reflects demand similarity and the inability to distinguish demand across the stores in a local market.
    JEL: L11
    Date: 2019–09
  16. By: Huttunen, Henri; Seppälä, Timo; Lähteenmäki, Ilkka; Mattila, Juri
    Abstract: Abstract Data as a resource and data sharing enable competitive supply chains and present-day digital platform business models. The recipe for these competitive supply chains will no longer be contingent on how different companies contract to share data in their existing business networks but how these companies make these contracts available for the others in multisided markets. Advancing the availability of data sharing contracts has led to novel internal and external operational efficiencies and to new types of strategic opportunities. Data sharing is nothing new. Approximately 49% of the companies already share data with other companies. How has data sharing emerged between companies? What types of benefits have companies reached by sharing data? Those are the two research questions we are answering in this study. Additionally, we map the trajectory of data sharing technologies and their benefits for companies. External strategic opportunities cannot be reached unless the product, service and software architectures are modular; in addition, the boundary resources are not being considered by the companies. Finally, the tools for evaluating the value capture of indirect network effects is missing from widely accepted business case valuation methods. The question remains – what type of data resources can companies treat as proprietary or as shared?
    Keywords: Data as a resource, Data sharing, Boundary resources, EDI-economy, API-economy, Network Effects, IHAN-project
    JEL: M21 O30 P49
    Date: 2019–09–19
  17. By: Donald J. Brown (Dept. of Economics, Yale University)
    Abstract: Ambiguous assets are characterized as assets where objective and subjective probabilities of tomorrow’s asset-returns are ill-deï¬ ned or may not exist, e.g., bitcoin, volatility indices or any IPO. Investors may choose to diversify their portfolios of ï¬ at money, stocks and bonds by investing in ambiguous assets, a fourth asset class, to hedge the uncertainties of future returns that are not risks. (IR)rational probabilities are computable alternative descriptions of the distribution of returns for ambiguous assets. (IR)rational probabilities can be used to deï¬ ne an investor’s (IR)rational expected utility function in the class of non-expected utilities. Investment advisors use revealed preference analysis to elicit the investor’s composite preferences for risk tolerance, ambiguity aversion and optimism. Investors rationalize (IR)rational expected utilities over portfolios of ï¬ at money, stocks, bonds and ambiguous assets by choosing their optimal portfolio investments with (IR)rational expected utilities. Subsequently, investors can hedge future losses of their optimal portfolios by purchasing minimum-cost portfolio insurance.
    Keywords: Behavioral Finance, Prospect Theory, Afriat Inequalities
    JEL: B31 C91 D9
    Date: 2019–09
  18. By: Enrico Berkes (The Ohio State University); Kristina Manysheva (Northwestern University); Marti Mestieri (Northwestern University)
    Abstract: We document the evolution of innovation patterns over the last 100 years for over 75 countries as measured by patent filings in these countries. We document how innova- tion has shifted across fields, from mechanical engineering in the beginning of the XXth century, to chemistry and physics in the mid-century, medicine and the digital economy. We also document how different countries have contributed to these shifts at different points in time and how innovation correlates across countries and across fields. Finally, we use the cross-country, cross-sectoral citation patterns to document knowledge link- ages in the innovation process. We leverage on these country-sector linkages to construct an instrument for innovation and assess the impact of innovation on sectoral productiv- ity, absolute and comparative advantage.
    Date: 2019
  19. By: Indaco, Agustín
    Abstract: Using all geo-located image tweets shared on Twitter in 2012-2013, I find that the volume of tweets is a valid proxy for estimating current GDP in USD at the country level. Residuals from my preferred model are negatively correlated to a data quality index, indicating that my estimates of GDP are more accurate for countries with more reliable GDP data. Comparing Twitter with more commonly-used proxy of night-light data, I find that variation in Twitter activity explains slightly more of the cross-country variance in GDP. I also exploit the continuous time and geographic granularity of social media posts to create monthly and weekly estimates of GDP for the US, as well as sub- national estimates, including those economic areas that span national borders. My findings suggest that Twitter can be used to measure economic activity in a more timely and more spatially disaggregate way than conventional data and that governments’ statistical agencies could incorporate social media data to complement and further reduce measurement error in their official GDP estimates.
    Keywords: National Accounts, Big Data
    JEL: C53 E01 Q11
    Date: 2019–03–19
  20. By: David Bounie (Télécom ParisTech); Antoine Dubus (Télécom ParisTech); Patrick Waelbroeck (Télécoms Paris Tech - Télécom ParisTech)
    Abstract: We investigate the strategies of a data intermediary selling customized consumer information to firms for price discrimination purpose. We analyze how the mechanism through which the data intermediary sells information influences how much consumer data he will collect and sell to firms, and how it impacts consumer surplus. We consider three selling mechanisms tailored to sell customized consumer information: take it or leave it offers, sequential bargaining, and simultaneous offers. We show that the more data the intermediary collects, the lower consumer surplus. Consumer data collection is minimized, and consumer surplus maximized under the take it or leave it mechanism, which is the least profitable mechanism for the intermediary. We argue that selling mechanisms can be used as a regulatory tool by data protection agencies and competition authorities to limit consumer information collection and increase consumer surplus.
    Date: 2019–09–15
  21. By: Biglaiser, Gary; Crémer, Jacques; Veiga, André
    Abstract: We study incumbency advantage in platform industries, where the utility of participating in a platform is increasing in the mass of users participating in that platform. Individuals receive stochastic opportunities to migrate from an incumbent to a new (entrant) platform, which they can accept or wait until the next opportunity arises. Individuals have an incentive to delay migration until enough other users have migrated, which provides a micro-foundation for incumbency advantage. When users obtain more frequent migration opportunities, the cost of delaying migration is reduced, so incumbency advantage increases. Migration technologies that allow for large groups of individuals to migrate in a short period of time (i.e., coordination) are also associated with higher incumbency advantage. There always exists some capacity constraint by the entrant which increases the cost of delaying migration and thereby reduces incumbency advantage. Multi-homing reduces incumbency advantage but does not eliminate it. When individuals have heterogeneous preferences for the two platforms, there can be welfare losses due to excessive segregation of individuals across the platforms.
    Date: 2019–09–18
  22. By: Dirk Bergemann (Cowles Foundation, Yale University); Alessandro Bonatti (MIT); Tan Gan (Department of Economics, Yale University)
    Abstract: A data intermediary pays consumers for information about their preferences, and sells the information so-acquired to ï¬ rms that use it to tailor their product offers and prices. The social dimension of the individual data - whereby an individual’s data is predictive of the behavior of others - generates a data externality that reduces the intermediary’s cost of acquiring information. We derive the data intermediary’s optimal information policy, and show that it preserves privacy over the identity of the consumers, but provides precise information about market demand to the ï¬ rms.
    Keywords: Consumer privacy, Social data; Personal information, Data intermediaries, data flow, Data policy, Data rights
    JEL: D44 D82 D83
    Date: 2019–09
  23. By: Barbara Ubaldi; Enzo Maria Le Fevre; Elisa Petrucci; Pietro Marchionni; Claudio Biancalana; Nanni Hiltunen; Daniela Maria Intravaia; Chan Yang
    Abstract: This Working Paper is intended to highlight the main opportunities and challenges for the use of emerging technologies (ET), and in particular emerging digital technologies, in the public sector. Based on the first results of the analysis of evidence collected in 20 countries, the paper offers a few insights on the state of the art on the strategies and practical examples on how governments are attempting to integrate ET in the public sector.
    Date: 2019–09–20
  24. By: Daniel Piazolo
    Abstract: Through a combination of various sources about employment data, insights about the probability of the risk of automation of real estate jobs within Germany can be derived. Sources are: 1.) BerufeNET data base of the German federal employment agency (Bundesagentur für Arbeit), 2.) JobFutoromat database with the estimation of automation probabilities of across-the-board occupations, 3.) Lists with the number of employees subject to social insurance on an occupation group level. Consequently, a weighted average of the automation probability of jobs within each occupational group and within the overall real estate sector of Germany can be derived. Thus the negative side of digitalization will be quantified (i.e. the job killer aspect). Since Germany is the largest economy within the European Union, some of the insights can be transferred to the European level. The paper also discusses, that the novel possibilities through the use of digital tools like artificial intelligence will create new employment possibilities within the various real estate areas. The challenges are addressed how to localize and to quantify the specific positive effect of digitalization (i.e. the job engine).
    Keywords: Automation; Digital Transformation; Disruption; Emplyoment; Structural Change
    JEL: R3
    Date: 2019–01–01
  25. By: Fantazzini, Dean; Zimin, Stephan
    Abstract: This paper proposes a set of models which can be used to estimate the market risk for a portfolio of crypto-currencies, and simultaneously to estimate also their credit risk using the Zero Price Probability (ZPP) model by Fantazzini et al (2008), which is a methodology to compute the probabilities of default using only market prices. For this purpose, both univariate and multivariate models with different specifications are employed. Two special cases of the ZPP with closed-form formulas in case of normally distributed errors are also developed using recent results from barrier option theory. A backtesting exercise using two datasets of 5 and 15 coins for market risk forecasting and a dataset of 42 coins for credit risk forecasting was performed. The Value-at-Risk and the Expected Shortfall for single coins and for an equally weighted portfolio were calculated and evaluated with several tests. The ZPP approach was used for the estimation of the probability of default/death of the single coins and compared to classical credit scoring models (logit and probit) and to a machine learning algorithm (Random Forest). Our results reveal the superiority of the t-copula/skewed-t GARCH model for market risk, and the ZPP-based models for credit risk.
    Keywords: cryptocurrencies; market risk; credit risk; ZPP
    JEL: C32 C5 C51 C53 C58 G12 G17 G32 G33
    Date: 2019
  26. By: Aleksander Berentsen (University of Basel); Christopher Waller (Federal Reserve Bank of St. Louis); Mariana Rojas Breu (University of Paris Dauphine)
    Abstract: We construct a search model where sellers post prices and produce goods of unknown quality. A match between a buyer and a seller reveals the quality of the seller. We look at the pricing decisions of the sellers in this environment. We then introduce a rating system whereby buyers reveal the seller's type by giving them a `star' if they are a high quality seller. We show that new sellers charge a low price to attract buyers and if they receive a star they post a high price. Furthermore, high quality sellers sell with a higher probability than new sellers. We show that welfare is higher with a ratings system. Using data on Airbnb rentals to compare the pricing decisions of Superhosts (elite rentals) to non-Superhosts we show that Superhosts: 1) charge higher prices, 2) have more bookings and 3) higher revenue than non-Super hosts.
    Date: 2019
  27. By: Rene Chalom (Federal Reserve Bank of New York); Benjamin Pugsley (University of Notre Dame); Fatih Karahan (Federal Reserve Bank of New York); Kurt Mitman (Stockholm University)
    Abstract: Recipients of unemployment insurance benefits may allocate payouts towards consumption, savings, or servicing outstanding debt. This paper examines the effects that unemployment benefits have on mortgage, automobile loan, and credit card debt delinquency, exploiting the variation across states in the magnitude of unemployment benefit extensions that were provided in response to the Great Recession. We find that additional unemployment benefits reduced mortgage debt delinquency in locations that avoided large home price declines in the aftermath of the recession. Accordingly, we conclude that the stimulus effects of unemployment insurance may be muted to the extent that benefit payments are used to satisfy housing debt obligations.
    Date: 2019
  28. By: Gajendran Raveendranathan (McMaster University); Kyle Herkenhoff (University of Minnesota)
    Abstract: How are the welfare costs from monopoly borne? We answer this question in the context of the U.S. credit card industry, which is highly concentrated, charges interest rates that are 3.4 to 8.8 percentage points above competitive pricing, generates excess profits, and has repeatedly lost antitrust lawsuits. We depart from existing consumer credit models that assume perfect competition (e.g. Livshits, MacGee, and Tertilt (2007,2010) and Chatterjee, Corbae, Nakajima, and Rios-Rull, 2007), by integrating oligopolistic lenders into a Bewley-Huggett-Aiyagariframework. Our model accounts for roughly half of the spreads and excess profits observed in the data. The welfare gains to the current population from competitive reforms in the credit card industry are equivalent to a onetime transfer to households worth 3.4 percent of GDP. Along the transition path, all cohorts realize welfare gains from competitive reforms. Asset poor households benefit the most from increased consumption smoothing. Asset rich households also benefit from higher general equilibrium saving interest rates.
    Date: 2019
  29. By: Simplice A. Asongu (Yaoundé/Cameroon); Jacinta C. Nwachukwu (Preston, United Kingdom); Stella-Maris I. Orim (Coventry University, UK); Chris Pyke (Preston, United Kingdom)
    Abstract: Purpose-The study complements the scant macroeconomic literature on the development outcomes of social media by examining the relationship between Facebook penetration and violent crime levels in a cross-section of 148 countries for the year 2012. Design/methodology/approach-The empirical evidence is based on Ordinary Least Squares (OLS), Tobit and Quantile regressions. In order to respond to policy concerns on the limited evidence on the consequences of social media in developing countries, the dataset is disaggregated into regions and income levels. The decomposition by income levels included: low income, lower middle income, upper middle income and high income. The corresponding regions include: Europe and Central Asia, East Asia and the Pacific, Middle East and North Africa, Sub-Saharan Africa and Latin America. Findings-From OLS and Tobit regressions, there is a negative relationship between Facebook penetration and crime. However, Quantile regressions reveal that the established negative relationship is noticeable exclusively in the 90th crime quantile. Further, when the dataset is decomposed into regions and income levels, the negative relationship is evident in the Middle East and North Africa (MENA) while a positive relationship is confirmed for sub-Saharan Africa. Policy implications are discussed. Originality/value- Studies on the development outcomes of social media are sparse because of a lack of reliable macroeconomic data on social media. This study primarily complemented five existing studies that have leveraged on a newly available dataset on Facebook.
    Keywords: Crime; Social media; ICT; Global evidence; Social networks
    JEL: K42 D83 O30 D74 D83
    Date: 2019–01
  30. By: Van Wolleghem, Pierre Georges; De Angelis, Marina; Scicchitano, Sergio
    Abstract: Whilst migration has become a structural feature of most European countries, the integration of foreigners in the labour market continues to raise concerns. Evidence across countries shows that migrants are more often over-educated than natives. Over the last years, scholarship has intended to capture the effect of informal networks on migrants’ over-education. Interestingly, no study has looked into the Italian case, yet a country for which the effect of networks on education-occupation mismatch is well documented. This article has two objectives: it assesses the extent to which over-education affects migrants and it evaluates the role informal networks play in producing it. We find that foreigners are more over-educated than natives but that the role of networks is consistent across the two groups. Empirical evidence is drawn from the application of quantitative and counter-factual methods to PLUS 2018 – Participation, Labour, Unemployment Survey.
    Keywords: Network,Over-education,Migrants,labour market
    JEL: F22 J61 Z13
    Date: 2019

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.