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on Payment Systems and Financial Technology |
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Issue of 2020‒11‒23
twenty-two papers chosen by |
| By: | Charaf Ech-Chatbi (X-DEP-MATHAPP - Département de Mathématiques Appliquées de l'École polytechnique - X - École polytechnique) |
| Abstract: | Our modern financial system traces its origin to the ancient Babylonian banking system. The same fractional lending idea that is used today was used by merchants in the regions of ancient Babylonia, Assyria and Sumeria around 2000 BC. Later, the idea found its way to ancient Greece, the Roman Empire, China, India and then to us. The fractional lending concept was not the fruit of scientific research like what is done in other scientific endeavors where most of the best ideas are the result of a long process of trial and error. Is it not time to rethink the way we do banking in this digital age and try other ideas? The last 40 years of cryptographic research culminated with the creation of Bitcoin currency system in 2009. We would like to expand on this and introduce three ideas to help rethink the banking system of the 21 st century: 1) the concept of a biometric currency, 2) the concept of being your own bank and issue your own loans with zero-interest rate 3) and redefining the fractional reserve lending. We propose a biometric currency concept that will enable people to self finance and to safely store their money in their hands. Contrary to cryptocurrencies that are issued by blockchain miners and Fiat currencies that are issued by bankers, Biom will be issued by everyone. The goal is to create from human life a precious asset like Gold that will benefit all. |
| Keywords: | Biometric Currency,Fractional Reserve Banking,Bit- coin,Cryptocurrency,Digital Currency,Banking System,Fractional Lend- ing,Quantitative Easing * One Raffles Quay,North Tower Level 35 048583 Singapore |
| Date: | 2020–10–23 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:hal-02975798&r=all |
| By: | Amrita Chatterjee (Assistant Professor, Madras School of Economics); Simontini Das (Assistant Professor, Jadavpur University, Kolkata: 700032) |
| Abstract: | Financial Inclusion has its primary objective in providing access to useful and affordable financial products and services that meet the needs of so far unbanked population for transactions, payments, savings, credit and insurance in a responsible and sustainable way. The penetration of banking services in India has made reasonable progress though there are still regional disparities with especially the rural and female population lagging behind. However, not only access but also usage of financial services matters. Moreover, as there is a strong initiative towards digitalized cashless economy in India, it is important to examine whether the country is ready for a more technology-driven financial system. As far as the diffusion of telecommunication technology is concerned, India has made a remarkable progress in urban areas giving rise to significant digital divide between rural and urban India. With spread of mobile and mobile internet though, this divide has come down to some extent. Thus if this inclination towards mobile technology can be properly channelized to improve the access as well as usage of financial services through spread of mobile banking then more and more people can be brought under the purview of institutional credit system leading to reduction in poverty and inequality. The current paper intends to study the role of information and communication technology (ICT) diffusion in improving the status of financial inclusion across the different states of India. Two separate indices for Financial Inclusion and Information Technology Diffusion are formed and the states are clustered to club the states similar in terms of their performance. Then the paper tries to test whether ICT diffusion is one of the indicators of Financial Inclusion in India. The dynamic panel data analysis helped us to identify the role of technology as well as other socio-economic factors which can contribute in interstate disparities in FI. The results show that technology does play an important role in improving financial inclusion. As the elderly people in rural as well as urban areas are still not that familiar with mobile and internet, they may not be able to get benefited by ICT revolution. But lack of education and more importantly poor status of financial literacy play a very vital role in FI |
| Keywords: | Financial Inclusion, Information and Communication Technology Diffusion, Dynamic Panel Data Model |
| JEL: | L86 L96 C23 G21 |
| URL: | http://d.repec.org/n?u=RePEc:mad:wpaper:2019-178&r=all |
| By: | Raphael A. Auer; Giulio Cornelli; Jon Frost |
| Abstract: | Central bank digital currencies (CBDCs) are receiving more attention than ever before. Yet the motivations for issuance vary across countries, as do the policy approaches and technical designs. We investigate the economic and institutional drivers of CBDC development and take stock of design efforts. We set out a comprehensive database of technical approaches and policy stances on issuance, relying on central bank speeches and technical reports. Most projects are found in digitised economies with a high capacity for innovation. Work on retail CBDCs is more advanced where the informal economy is larger. We next take stock of the technical design options. More and more central banks are considering retail CBDC architectures in which the CBDC is a direct cash-like claim on the central bank, but where the private sector handles all customer-facing activity. We conclude with an in-depth description of three distinct CBDC approaches by the central banks of China, Sweden and Canada. |
| Keywords: | central bank digital currency, CBDC, payments, central banking, digital currency, digital money, distributed ledger technology, blockchain |
| JEL: | E42 E44 E51 E58 G21 G28 F31 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_8655&r=all |
| By: | Rishabh Kirpalani; Thomas Philippon |
| Abstract: | We study an economy in which consumers and merchants (sellers) interact on a two-sided platform. Consumers can share data about their tastes for different varieties of a single good with the platform which in turn sells this data to merchants. Data sharing increases gains from trade by improving match quality but gives more market power to the platform relative to the merchants which can reduce entry and consequently consumer welfare. This leads to an externality not internalized by consumers thus leading to more data sharing than is efficient. We highlight two reasons why more precise information increases the market power of the platform. The first is a copycat (private label) externality that increases the outside option for the platform of selling the good directly to consumers. The second is a consumer access externality that reduces the outside option of the merchants when information gets more precise, as more buyers are able to find their desired variety on the platform. Our model explains the qualitative differences between traditional retail platforms (physical stores) and digital online platforms and why the latter are more likely to require regulatory interventions that the former. |
| JEL: | D2 D4 D42 D43 L11 L12 |
| Date: | 2020–10 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:28023&r=all |
| By: | Maria Concetta Ambra (Department of Social Sciences and Economics, Sapienza University of Rome) |
| Abstract: | This article focuses on Amazon Mechanical Turk (AMT), the crowdsourcing platform created by Amazon, with the aim to enrich our knowledge of this specific platform and to contribute to the debate on ‘platform economy’. In light of the massive changes triggered by the new digital revolution, many scholars have recently examined how platform work has changed, by exploring transformations in employee status and the new content of platform work. This article addresses two interrelated questions: to what extent and in what ways does AMT chal-lenge the boundaries between paid and unpaid digital labour? How does AMT exploit online labour to extract surplus value? The research was undertaken from December 2018 and July 2019, through the collection of 50 doc-uments originating from three Amazon web sites. These documents have been examined though the technique of content analysis by adopting the NVivo software. In conclusion, it explains how Amazon has been able to develop a hybrid system of human-machine work. This specific model can be also fruitful used to speed up the machine learning process and to make it more accurate. |
| Keywords: | Amazon Mechanical Turk; Crowdsourcing Platform; Digital Piecework; Intellectual Property Rights; Machine Learning |
| JEL: | J30 J83 D20 O30 |
| Date: | 2020–11 |
| URL: | http://d.repec.org/n?u=RePEc:saq:wpaper:19/20&r=all |
| By: | Chiara Farronato; Jessica Fong; Andrey Fradkin |
| Abstract: | Digital platforms are increasingly the subject of regulatory scrutiny. In comparison to multiple competitors, a single platform may increase consumer welfare if network effects are large or may decrease welfare due to higher prices or reduction in platform variety. We study the net effect of this trade-off in the context of the merger between the two largest platforms for pet-sitting services. We exploit variation in pre-merger market shares and a difference-in-differences approach to causally estimate network effects at the platform and market level. We find that consumers are, on average, not substantially better off with a single combined platform than with two separate and competing platforms. On one hand, users of the acquiring platform benefited from the merger because of network effects. On the other hand, users of the acquired platform experienced worse outcomes. Our results highlight the importance of platform differentiation even when platforms enjoy network effects. |
| JEL: | D22 D43 L12 L41 L81 M21 |
| Date: | 2020–11 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:28047&r=all |
| By: | Lo, Yuen; Medda, Francesca |
| Abstract: | Despite blockchain based digital assets trading since 2009, there has been a functional gap between (1) on-chain transactions and (2) trust based centralized exchanges. This is now bridged with the success of Uniswap, a decentralized exchange. Uniswap's constant product automated market maker enables the trading of blockchain token without relying on market makers, bids or asks. This overturns centuries of practice in financial markets, and constitutes a building block of a new decentralized financial system. We apply ARDL and VAR methodologies to a dataset of 999 hours of Uniswap trading, and conclude that its simplicity enables liquidity providers and arbitrageurs to ensure the ratio of reserves match the trading pair price. We find that changes in Ether reserves Granger causes changes in USDT reserves. |
| Keywords: | Uniswap, Decentralized exchange, Blockchain, Ethereum, Tokenomics |
| JEL: | D47 D53 G14 O31 |
| Date: | 2020–11–03 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:103925&r=all |
| By: | Madiha Bendjaballah (CEREFIGE - Centre Européen de Recherche en Economie Financière et Gestion des Entreprises - UL - Université de Lorraine); Christian Dianoux (CEREFIGE - Centre Européen de Recherche en Economie Financière et Gestion des Entreprises - UL - Université de Lorraine) |
| Abstract: | The connected seller is not a new subject. This paper tries to give a new approach by focusing on the impact of using MSA (Mobile Sales Assistant) on the customer experience. A study which therefore complements the first studies on the MSA, more focused on the seller perception and on the store performance. Through an approach based on the creation and destruction of values, the results of our qualitative study show that the MSA leads to an improvement in the value of functional shopping but can also generates, in some situations, a deterioration in the value of relationship shopping. The study also gives first thoughts concerning the hedonic shopping value. These results complement the existing studies and offer an interesting first contribution on the perceived value from the consumer's point of view. |
| Abstract: | Face à la concurrence des pure players, les points de vente physique doivent en permanence se réinventer. Pour cela, nombre d'entre eux se sont engagés dans un processus de digitalisation plus ou moins marqué : présence d'écrans géants, de tablettes numériques à disposition des clients ou encore des vendeurs connectés, présents pour assurer des fonctions logistiques et de conseil. Si plusieurs recherches ont été menées sur l'utilisation du Mobile Sales Assistant (MSA) par le vendeur, aucune ne s'est intéressée, à notre connaissance, à la perception qu'en avait le client. La présente étude tente d'apporter une réponse à cette délicate question en s'intéressant plus particulièrement à la création et la destruction de valeurs que cet outil est susceptible de générer. Les résultats de notre étude qualitative montrent ainsi que si le MSA conduit à une amélioration de la valeur de magasinage fonctionnelle, il peut générer dans certains cas une détérioration de la valeur de magasinage relationnelle. L'étude offre également quelques pistes de réflexion quant à la valeur de magasinage hédonique. Ces résultats offrent une première contribution intéressante sur la valeur perçue du point de vue du consommateur. |
| Keywords: | digital tools,MSA,acceptance,perceived value,creation and destruction of values,stores,objets connectés,NAVA,acceptation,valeur perçue,création de valeurs,destruction de valeurs,point de vente physiques |
| Date: | 2020–09–03 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-02977370&r=all |
| By: | Haoqian Zhang; Cristina Basescu; Bryan Ford |
| Abstract: | While democracy is founded on the principle of equal opportunity to manage our lives and pursue our fortunes, the forms of money we have inherited from millenia of evolution has brought us to an unsustainable dead-end of exploding inequality. PoPCoin proposes to leverage the unique historical opportunities that digital cryptocurrencies present for a "clean-slate" redesign of money, in particular around long-term equitability and sustainability, rather than solely stability, as our primary goals. We develop and analyze a monetary policy for PoPCoin that embodies these equitability goals in two basic rules that maybe summarized as supporting equal opportunity in "space" and "time": the first by regularly distributing new money equally to all participants much like a basic income, the second by holding the aggregate value of these distributions to a constant and non-diminishing portion of total money supply through demurrage. Through preliminary economic analysis, we find that these rules in combination yield a unique form of money with numerous intriguing and promising properties, such as a quantifiable and provable upper bound on monetary inequality, a natural "early adopter's reward" that could incentivize rapid growth while tapering off as participation saturates, resistance to the risk of deflationary spirals, and migration incentives opposite those created by conventional basic incomes. |
| Date: | 2020–11 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2011.01712&r=all |
| By: | Jacques Fontanel (CESICE - Centre d'études sur la sécurité internationale et les coopérations européennes - IEPG [?-2019] - Sciences Po Grenoble - Institut d'études politiques de Grenoble [?-2019] - UPMF - Université Pierre Mendès France - Grenoble 2) |
| Abstract: | La menace d'arrêt de l'application Tik Tok aux Etats-Unis décidés par la Maison Blanche constitue une nouvelle péripétie du conflit qui oppose aujourd'hui dans les domaines du commerce international et de l'industrie digitale les Etats-Unis à la Chine. Les règles des accords internationaux tels que définis par l'OMC ne sont pas vraiment respectées, sauf en actionnant l'exception de la sécurité nationale. Comment TikTok, utilisé principalement par des adolescents du monde entier (plus d'un milliard d'utilisateurs), peut-elle mettre en danger la sécurité des Etats-Unis ? Si c'est le cas, alors comment les autres pays peuvent-ils se positionner devant l'omnipotence des GAFAM (Google, Apple, Facebook, Amazon, Microsoft) ? |
| Abstract: | The White House's threat to stop the application of TikTok in the United States is a new twist in the conflict that now pits the United States against China in the fields of international trade and digital industry. The rules of international agreements as defined by the WTO are not really respected, except by invoking the national security exception. How can TikTok, used mainly by teenagers around the world (more than 1 billion users), endanger the security of the United States? If this is the case, then how can other countries position themselves in front of the omnipotence of the GAFAM (Google, Apple, Facebook, Amazon, Microsoft) ? |
| Keywords: | GAFAM,digital economy,WTO,national security,economic warfare,économie digitale,OMC,sécurité nationale,guerre économique. |
| Date: | 2020–10–26 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:hal-02984126&r=all |
| By: | Claire Yurong Hong; Xiaomeng Lu; Jun Pan |
| Abstract: | This paper examines how FinTech can lower investment barriers and help households move toward optimal risk-taking, using a unique account-level data on consumption, investments, and FinTech usage from Ant Group. During our sample period, China experienced a rapid increase in FinTech penetration in the form of offline digital payment, and our measure of FinTech adoption is constructed relative to this fast-developing trend of new technology. Taking advantage of our consumption data, we further infer individuals’ risk tolerance from their consumption volatility. We find that, while Fin-Tech adoption improves risk-taking for all, the more risk-tolerant individuals benefit more from FinTech advancement. The magnitude of FinTech improvement is further quantified relative to the optimal alignment of risk-taking and consumption prescribed by Merton (1971). Aggregating to the city-level, we find significant variations in Fin-Tech adoption across cities in China, owing to the gradual spread of the new technology from Hangzhou to inner China. Examining the enhancement in risk-taking across geographical locations, we find that cities with low financial-service coverage benefit the most from FinTech penetration. Overall, our results show that, by unshackling the traditional constraints, FinTech improves risk-taking for individuals who need it the most. |
| JEL: | G11 |
| Date: | 2020–11 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:28063&r=all |
| By: | Constandina Koki; Stefanos Leonardos; Georgios Piliouras |
| Abstract: | In this paper, we consider a variety of multi-state Hidden Markov models for predicting and explaining the Bitcoin, Ether and Ripple returns in the presence of state (regime) dynamics. In addition, we examine the effects of several financial, economic and cryptocurrency specific predictors on the cryptocurrency return series. Our results indicate that the 4-states Non-Homogeneous Hidden Markov model has the best one-step-ahead forecasting performance among all the competing models for all three series. The superiority of the predictive densities, over the single regime random walk model, relies on the fact that the states capture alternating periods with distinct returns' characteristics. In particular, we identify bull, bear and calm regimes for the Bitcoin series, and periods with different profit and risk magnitudes for the Ether and Ripple series. Finally, we observe that conditionally on the hidden states, the predictors have different linear and non-linear effects. |
| Date: | 2020–11 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2011.03741&r=all |
| By: | Joshua E. Blumenstock; Matthew Olckers |
| Abstract: | Mobile phone-based gambling has grown wildly popular in Africa. Commentators worry that low ability gamblers will not learn from experience, and may rely on debt to gamble. Using data on financial transactions for over 50 000 Kenyan smartphone users, we find that gamblers do learn from experience. Gamblers are less likely to bet following poor results and more likely to bet following good results. The reaction to positive and negative feedback is of equal magnitude, and is consistent with a model of Bayesian updating. Using an instrumental variables strategy, we find no evidence that increased gambling leads to increased debt. |
| Date: | 2020–11 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2011.00432&r=all |
| By: | Andre Veiga (Imperial College London); Tommaso Valletti (Imperial College London) |
| Abstract: | We conduct an experiment where 1,000 individuals read online news articles and are shown ads for branded goods next to those articles. Using eye-tracking technology, we measure the attention that each individual devotes to reading each article and viewing each ad. Then, respondents choose between cash or vouchers for branded goods. We find that attention is a predictor both of willingness-to-pay for brands, and for brand recall. We also give suggestive evidence of the main drivers of attention. These include the type of news, and the match between individual political preferences and the media outlet. |
| Keywords: | Online Advertising, Experiments, Attention, E-commerce, Targeting |
| JEL: | M37 C91 L86 |
| Date: | 2020–10 |
| URL: | http://d.repec.org/n?u=RePEc:net:wpaper:2015&r=all |
| By: | Bitter, Lea |
| Abstract: | One of the main concerns when considering Central Bank Digital Currency (CBDC) is the disintermediating effect on the banking sector in normal times, and even more the risk of a bank run in times of crisis. This paper extends the bank run model of Gertler and Kiyotaki (2015) by analyzing the impact of a CBDC. A CBDC is an additional type of liability to the central bank which, by accounting identity, must be accompanied by respective accommodations on the asset side. The model compares the effects of two different asset side policies with each other and to the economy without a CBDC. I find that a CBDC reduces net worth in the banking sector in normal times but mitigates the risk of a bank run in times of crisis. The prevailing concerns about the risk of a bank run turn out to be partial equilibrium considerations disregarding the asset side effects of a CBDC. |
| Keywords: | Central Bank Digital Currency (CBDC),Digital Currency,Central Banking,Financial Intermediation,Bank Runs,Lender of Last Resort |
| JEL: | E42 E58 G01 G21 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:vfsc20:224600&r=all |
| By: | Rhode Ghislaine Nguewo Ngassam (MRM - Montpellier Research in Management - UM1 - Université Montpellier 1 - UPVM - 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 Ologeanu-Taddei (TBS - Toulouse Business School); Jorick Lartigau; Isabelle Bourdon (MRM - Montpellier Research in Management - UM1 - Université Montpellier 1 - UPVM - 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) |
| Abstract: | Blockchain has often been mentioned in recent years as being a promising innovation for the healthcare sector in that it can ensure the secure exchange and traceability of information while respecting the regulatory framework for the confidentiality and portability of healthcare data. However, concrete cases remain very rare in the literature, and we investigate relevant use cases applying blockchain in healthcare. This chapter shows how we design a blockchain-based allergy card to solve real-life issues that is register, share and trace information about drug allergies. Therefore, we iteratively use action design research to determine the needs, design solution, develop the application and evaluate outcomes by involving stakeholders in the construction and evaluation. |
| Abstract: | Ces dernières années, la chaîne de blocs a souvent été mentionnée comme une innovation prometteuse pour le secteur des soins de santé, dans la mesure où elle permet d'assurer l'échange sécurisé et la traçabilité des informations tout en respectant le cadre réglementaire en matière de confidentialité et de portabilité des données relatives aux soins de santé. Cependant, les cas concrets restent très rares dans la littérature, et nous étudions les cas d'utilisation pertinents appliquant la blockchain dans les soins de santé. Ce chapitre montre comment nous concevons une carte d'allergie basée sur une chaîne de blocs pour résoudre des problèmes concrets, à savoir l'enregistrement, le partage et la traçabilité des informations sur les allergies aux médicaments. Par conséquent, nous utilisons de manière itérative la recherche en conception d'action pour déterminer les besoins, concevoir la solution, développer l'application et évaluer les résultats en impliquant les parties prenantes dans la construction et l'évaluation. |
| Keywords: | Private blockchain,Allergy card,Traceability,Security,Healthcare |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-02972380&r=all |
| By: | Bruno Mathis (CEDE - Centre Européen de Droit et d'Economie - Essec Business School) |
| Abstract: | Switzerland definitively adopted, on September 25, 2020, a law adapting its federal law to distributed ledger technology (DLT). While the European Commission had just presented, the day before, its own proposal for a legislative package on crypto-assets, the framework designed by Switzerland, a country not constrained by European law, but endowed with a sophisticated financial market, deserves an exam. |
| Abstract: | La Suisse a adopté définitivement, le 25 septembre 2020, une loi d'adaptation de son droit fédéral à la technologie des registres distribués (TRD). Alors que la Commission européenne venait de déposer, la veille, sa propre proposition d'un paquet législatif sur les crypto-actifs, le dispositif conçu par la Suisse, non contrainte par le droit européen, mais dotée d'un marché financier sophistiqué, mérite un examen. |
| Date: | 2020–11–05 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:hal-02991122&r=all |
| By: | Soumajyoti Sarkar |
| Abstract: | Motivated by recent applications of sequential decision making in matching markets, in this paper we attempt at formulating and abstracting market designs in peer lending. In the rest of this paper, what will follow is a paradigm to set the stage for how peer lending can be conceived from a matching market perspective with sequential design making embedded in it. We attempt at laying the stepping stones toward understanding how sequential decision making can be made more flexible in peer lending platforms and as a way to devise more fair and equitable outcomes for both borrowers and lenders. The goal of this paper is to provide some ideas on how and why lending platforms conceived from the perspective of matching markets can allow for incorporating fairness and equitable outcomes when we design lending platforms. |
| Date: | 2020–10 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2011.04400&r=all |
| By: | Andria Andriuzzi (UJM - Université Jean Monnet [Saint-Étienne]); Géraldine Michel (IAE Paris - Sorbonne Business School); Claudiu Dimofte |
| Abstract: | to those they have towards other individuals (Fournier and Alvarez 2012). One increasingly important avenue that practitioners employ in order to bring brands closer to consumers is social media and a wide range of online platforms (Voorveld 2019). A specific form of such interaction, brand conversation, is a particularly relevant construct consisting of a series of online messages exchanged between one or more consumers and a brand [representative]. The exchanges that brands and consumers have on social media are conceptually akin to social interactions, but happen to occur within new media types. Thus, research on social interaction is relevant to understanding the processes that may be at work. In order to answers these questions, our research employs face-work theory (Goffman 1955), attachment theory (Park et al. 2010), and the interpersonal theory of love applied to consumer situations (Whang, Sahoury, and Zhang 2004). We propose that, similar to the case of personal relationships that involve affect, when a partner bestows flattery or compliments onto someone outside of the relationship there is the potential to threaten the other partner and produce jealousy, with potential deleterious effects on the relationship. |
| Keywords: | Brand,Jealousy,Social media,Face-work |
| Date: | 2020–10–01 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-02977457&r=all |
| By: | Andrej Gill; Matthias Heinz; Heiner Schumacher; Matthias Sutter (Max Planck Institute for Research on Collective Goods, Bonn) |
| Abstract: | The financial industry has been struggling with widespread misconduct and public mistrust. Here we argue that the lack of trust into the financial industry may stem from the selection of subjects with little, if any, trustworthiness into the financial industry. We identify the social preferences of business and economics students, and follow up on their first job placements. We find that during college, students who want to start their career in the financial industry are substantially less trustworthy. Most importantly, actual job placements several years later confirm this association. The job market in the financial industry does not screen out less trustworthy subjects. If anything the opposite seems to be the case: Even among students who are highly motivated to work in finance after graduation, those who actually start their career in finance are significantly less trustworthy than those who work elsewhere. |
| Keywords: | Trustworthiness, Financial Industry, Selection, Social Preferences, Experiment |
| JEL: | C91 G20 M51 |
| Date: | 2020–08 |
| URL: | http://d.repec.org/n?u=RePEc:mpg:wpaper:2020_19&r=all |
| By: | Joan Calzada (Universitat de Barcelona); Ester Manna (Universitat de Barcelona); Andrea Mantovani (University of Bologna) |
| Abstract: | We investigate how the adoption of price parity clauses (PPCs) by established platforms affects the listing decisions of suppliers. PPCs have been widely adopted by online travel agencies (OTAs) to force client hotels not to charge lower prices in alternative sales channels. We find that OTAs adopt PPCs when they are perceived as highly substitutable, and in order to prevent showrooming. PPCs allow OTAs to charge hotels higher commission fees. However, hotels can respond by delisting themselves from some OTAs. Hence, our analysis reveals that the removal of PPCs enables more hotels to resort to OTAs. This is beneficial for consumers, as prices decrease in absence of PPCs. |
| Keywords: | Price parity clauses, Online travel agencies, Segmentation, Vertical relations. |
| JEL: | D40 L42 L81 |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:ewp:wpaper:387web&r=all |
| By: | Jia, Pengfei |
| Abstract: | Paying negative interest rates on central bank digital currency (CBDC) becomes increasingly relevant to monetary operations, since several major central banks have been actively exploring both negative interest rate policy and CBDC after the Great Recession. This paper provides a formal analysis to evaluate the macroeconomic impact of negative interest rates on CBDC through the lens of a neoclassical general equilibrium model with monetary aggregates. In the benchmark model, agents have access to two types of assets: CBDC and productive capital. The demand for digital currency is motivated by a liquidity constraint. I show that paying negative interest on CBDC induces agents to save less and consume more via a substitution effect. A drop in savings in turn causes a fall in capital investment, subsequent output, and real money balances. To clear the money market, the price level increases. I then extend the model to include government bonds which deliver a positive return. This allows me to study a non-trivial portfolio effect: when the government pays a negative interest rate on CBDC, the tax on agents' capital spending increases, inducing a decrease in capital investment and an increase in government bonds in agents' portfolio. Such a policy causes a drop in investment and output. However, there is a transitory decline in the price level due to a "flight to quality". |
| Keywords: | CBDC, Negative interest rates, Monetary policy, Public money. |
| JEL: | E21 E22 E31 E42 E52 E63 |
| Date: | 2020–10–26 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:103828&r=all |