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on Payment Systems and Financial Technology |
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Issue of 2021‒06‒21
thirty papers chosen by |
| By: | Ashworth, Jonathan; Goodhart, Charles A |
| Abstract: | Over the past decade the media have regularly reported on the imminent death of cash amid rapid innovation in payment technologies. However, cash in circulation has actually been growing strongly in many counties. Perhaps unsurprisingly given Coronavirus-related health concerns, there have been renewed calls to abandon cash and some observers have argued the virus will accelerate its demise. Data thus far suggest, however, that currency in circulation has actually surged in a number of countries. While the economic shutdowns and increased use of online retailing are currently diminishing cash's traditional function as a medium of exchange, it seems that this is being more than offset by panic driven hoarding of banknotes. |
| Keywords: | Coronavirus; Currency usage; Hoarding in panics; Payment technologies |
| JEL: | E40 E41 E49 E63 N10 |
| Date: | 2020–06 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:14910&r= |
| By: | Tomasz Piotr Wisniewski (The Open University); Michal Polasik (Nicolaus Copernicus University); Radoslaw Kotkowski (Narodowy Bank Polski); Andrea Moro (Cranfield University) |
| Abstract: | Using a survey of 5,504 respondents from 22 European countries,we examine preferences regarding cash and cashless payments at the point of sale (POS) during the COVID-19 crisis. Consumers favor cashless transactions when they believe that handling cash presents a higher risk of infection. Moreover, the habits they develop during periods of restrictions and lockdowns appear to further diminish their appetite for transacting in cash. Not only do these factors affect current choice of payment method, but also influence declared future intentions to move away from cash after the pandemic is over. |
| Keywords: | COVID-19; SARS-CoV-2; Cash; Cashless payments; Payment behavior; Habit change; Fear |
| JEL: | E41 E42 I12 I18 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:nbp:nbpmis:337&r= |
| By: | Kaihua Qin; Liyi Zhou; Yaroslav Afonin; Ludovico Lazzaretti; Arthur Gervais |
| Abstract: | To non-experts, the traditional Centralized Finance (CeFi) ecosystem may seem obscure, because users are typically not aware of the underlying rules or agreements of financial assets and products. Decentralized Finance (DeFi), however, is making its debut as an ecosystem claiming to offer transparency and control, which are partially attributable to the underlying integrity-protected blockchain, as well as currently higher financial asset yields than CeFi. Yet, the boundaries between CeFi and DeFi may not be always so clear cut. In this work, we systematically analyze the differences between CeFi and DeFi, covering legal, economic, security, privacy and market manipulation. We provide a structured methodology to differentiate between a CeFi and a DeFi service. Our findings show that certain DeFi assets (such as USDC or USDT stablecoins) do not necessarily classify as DeFi assets, and may endanger the economic security of intertwined DeFi protocols. We conclude this work with the exploration of possible synergies between CeFi and DeFi. |
| Date: | 2021–06 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2106.08157&r= |
| By: | Solikin M. Juhro (Bank Indonesia) |
| Abstract: | This paper is aimed to explore salient issues of central banking practices, especially on challenges confronted by central banks in the digital era, lessons learned, as well as their implications. As we have acknowledged, in the midst of major financial crises in the last two decades, central banks faced very complex policy challenges blighted with high uncertainty, all of which have changed the practical and theoretical perspectives of central bank policy. The complexity and uncertainty of issues faced by central banks have and will continue to evolve in line with the advancement of digital technology. Navigating central banking practices in the digital era, therefore, is a very challenges task that requires the central bank's ability to create breakthroughs and orchestrate policy innovations. While the central bank policy mix is still a viable strategy, central banks are required to operate beyond conventional wisdom, with novel practices. Optimizing the benefits of technological advances and becoming a relevant regulator in the digital era must anchor the central bank's strategy in the future. |
| Keywords: | Central Bank Policy, Digital Transformation, Central Bank Digital Currency |
| JEL: | E52 E58 O3 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:idn:wpaper:wp012021&r= |
| By: | Simplice A. Asongu (Yaounde, Cameroon); Peter Agyemang-Mintah (United Arab Emirate, UAE); Rexon T. Nting (London, UK) |
| Abstract: | This study investigates how the rule of law (i.e. law) modulates demand- and supply-side drivers of mobile money to influence mobile money innovations (i.e. mobile money accounts, the mobile phone used to send money and the mobile phone used to receive money) in developing countries. The following findings from Tobit regressions are established. First, from the demand-side linkages, law modulates: (i) bank accounts and automated teller machine (ATM) penetration for negative interactive relationships with mobile money innovations and (ii) bank sector concentration for a positive interactive relationship with mobile money accounts. Second, from supply-side linkages, law interacts with: (i) mobile subscriptions for a negative relationship with the mobile phone used to send money; (ii) mobile connectivity coverage for a negative nexus on the mobile phone used to receive money and (iii) mobile connectivity performance for a negative influence on the mobile phone used to send/receive money. Policy implications are discussed in the light of enhancing the rule of law as well as improving mobile phone subscription, connectivity and performance dynamics. |
| Keywords: | Mobile money; technology diffusion; financial inclusion; inclusive innovation |
| JEL: | D10 D14 D31 D60 O30 |
| Date: | 2021–01 |
| URL: | http://d.repec.org/n?u=RePEc:abh:wpaper:21/021&r= |
| By: | Georges Casamatta (Università di Corsica); Sauveur Giannoni (Università di Corsica); Daniel Brunstein (Università di Corsica); Johan Jouve (Università di Corsica; Università di Corsica) |
| Abstract: | The literature on short-term rental emphasises the heterogeneity of the hosts pop- ulation. Some argue that professional and opportunistic hosts differ in terms of their pricing strategy. This study highlights how differences in market perception and in- formation create a price differential between professional and non-professional players. Proposing an original and accurate definition of professional hosts, we rely on a large dataset of almost 9,000 properties and 73,000 observations to investigate the pricing behaviour of Airbnb sellers in Corsica (France). Using OLS and the double-machine learning methods, we demonstrate that a price differential exists between professional and opportunistic sellers. In addition, we assess the impact of seasonality in demand on the size and direction of this price differential. Professionals perceive a higher de- gree of market power than others during the peak season and it allows them to enhance their revenues. |
| Date: | 2021–05 |
| URL: | http://d.repec.org/n?u=RePEc:lia:wpaper:021&r= |
| By: | Tim Roughgarden |
| Abstract: | Demand for blockchains such as Bitcoin and Ethereum is far larger than supply, necessitating a mechanism that selects a subset of transactions to include "on-chain" from the pool of all pending transactions. EIP-1559 is a proposal to make several tightly coupled changes to the Ethereum blockchain's transaction fee mechanism, including the introduction of variable-size blocks and a burned base fee that rises and falls with demand. These changes are slated for deployment in Ethereum's "London fork," scheduled for late summer~2021, at which point it will be the biggest economic change made to a major blockchain to date. The first goal of this paper is to formalize the problem of designing a transaction fee mechanism, taking into account the many idiosyncrasies of the blockchain setting (ranging from off-chain collusion between miners and users to the ease of money-burning). The second goal is to situate the specific mechanism proposed in EIP-1559 in this framework and rigorously interrogate its game-theoretic properties. The third goal is to suggest competing designs that offer alternative sets of trade-offs. The final goal is to highlight research opportunities for the EC community that could help shape the future of blockchain transaction fee mechanisms. |
| Date: | 2021–06 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2106.01340&r= |
| By: | Simplice A. Asongu (Yaounde, Cameroon); Nicholas M. Odhiambo (Pretoria, South Africa) |
| Abstract: | This study complements the extant literature by assessing how enhancing supply factors of mobile technologies affect mobile money innovations for financial inclusion in developing countries. The mobile money innovation outcome variables are: mobile money accounts, the mobile phone used to send money and the mobile phone used to receive money. The mobile technology supply factors are: unique mobile subscription rate, mobile connectivity performance, mobile connectivity coverage and telecommunications (telecom) sector regulation. The empirical evidence is based on quadratic Tobit regressions and the following findings are established. There are Kuznets or inverted shaped nexuses between three of the four supply factors and mobile money innovations from which thresholds for complementary policies are provided as follows: (i) Unique adults’ mobile subscription rates of 128.500%, 121.500% and 77.750% for mobile money accounts, the mobile used to send money and the mobile used to receive money, respectively; (ii) the average share of the population covered by 2G, 3G and 4G mobile data networks of 61.250% and 51.833% for the mobile used to send money and the mobile used to receive money, respectively; and (iii) a telecom sector regulation index of 0.409, 0.283 and 0.283 for mobile money accounts, the mobile phone used to send money and the mobile phone used to receive money, respectively. Some complementary policies are discussed, because at the attendant thresholds, the engaged supply factors of mobile money technologies become necessary, but not sufficient conditions of mobile money innovations for financial inclusion. |
| Keywords: | Mobile money; technology diffusion; financial inclusion; inclusive innovation |
| JEL: | D10 D14 D31 D60 O30 |
| Date: | 2021–01 |
| URL: | http://d.repec.org/n?u=RePEc:abh:wpaper:21/024&r= |
| By: | Simon Cousaert; Jiahua Xu; Toshiko Matsui |
| Abstract: | Yield farming has been an immensely popular activity for cryptocurrency holders since the explosion of Decentralized Finance (DeFi) in the summer of 2020. In this Systematization of Knowledge (SoK), we study a general framework for yield farming strategies with empirical analysis. First, we summarize the fundamentals of yield farming by focusing on the protocols and tokens used by aggregators. We then examine the sources of yield and translate those into three example yield farming strategies, followed by the simulations of yield farming performance, based on these strategies. We further compare four major yield aggregrators -- Idle, Pickle, Harvest and Yearn -- in the ecosystem, along with brief introductions of others. We systematize their strategies and revenue models, and conduct an empirical analysis with on-chain data from example vaults, to find a plausible connection between data anomalies and historical events. Finally, we discuss the benefits and risks of yield aggregators. |
| Date: | 2021–05 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2105.13891&r= |
| By: | Eric Monnet; Francois R. Velde |
| Abstract: | We review developments in the history of money, banking, and financial intermediation over the last twenty years. We focus on studies of financial development, including the role of regulation and the history of central banking. We also review the literature of banking and financial crises. This area has been largely unaffected by the so-called new econometric methods that seek to prove causality in reduced form settings. We discuss why historical macroeconomics is less amenable to such methods, discuss the underlying concepts of causality, and emphasize that models remain the backbone of our historical narratives. |
| Keywords: | historical macroeconomics; money; banking; financial intermediation |
| JEL: | N01 N10 N20 |
| Date: | 2020–11–13 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedhwp:92646&r= |
| By: | Daron Acemoglu; Asuman Ozdaglar; James Siderius |
| Abstract: | We present a model of online content sharing where agents sequentially observe an article and must decide whether to share it with others. The article may contain misinformation, but at a cost, agents can fact-check it to determine whether its content is entirely accurate. While agents derive value from future shares, they simultaneously fear getting caught sharing misinformation. With little homophily in the “sharing network”, misinformation is often quickly identified and brought to an end. However, when homophily is strong, so that agents anticipate that only those with similar beliefs will view the article, misinformation spreads more rapidly because of echo chambers. We show that a social media platform that wishes to maximize content engagement will propagate extreme articles amongst the most extremist users, while not showing these articles to ideologically opposed users. This creates an endogenous echo chamber—filter bubble—that makes misinformation spread virally. We use this framework to understand how regulation can encourage more fact-checking by online users and mitigate the consequences of filter bubbles. |
| JEL: | D83 D85 P16 |
| Date: | 2021–06 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:28884&r= |
| By: | Gandal, Neil; Gans, Joshua; Haeringer, Guillaume; Halaburda, Hanna |
| Abstract: | Since its launch in 2009 much has been written about Bitcoin, cryptocurrencies and blockchains. While the discussions initially took place mostly on blogs and other popular media, we now are witnessing the emergence of a growing body of rigorous academic research on these topics. By the nature of the phenomenon analyzed, this research spans many academic disciplines including macroeconomics, law and economics and computer science. This survey focuses on the microeconomics of cryptocurrencies themselves. What drives their supply, demand, trading price and competition amongst them. This literature has been emerging over the past decade and the purpose of this paper is to summarize its main findings so as to establish a base upon which future research can be conducted. |
| Keywords: | Cryptocurrencies Bitcoin Blockchain |
| Date: | 2020–06 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:14972&r= |
| By: | Jian Jia; Ginger Zhe Jin; Liad Wagman |
| Abstract: | Digital platforms are not only match-making intermediaries but also establish internal rules that govern all users in their ecosystems. To better understand the governing role of platforms, we study two Airbnb pro-guest rules that pertain to guest and host cancellations, using data on Airbnb and VRBO listings in 10 US cities. We demonstrate that such pro-guest rules can drive demand and supply to and from the platform, as a function of the local platform competition between Airbnb and VRBO. Our results suggest that platform competition sometimes dampens a platform wide pro-guest rule and sometimes reinforces it, often with heterogeneous effects on different hosts. This implies that platform competition does not necessarily mitigate a platform's incentive to treat the two sides asymmetrically, and any public policy in platform competition must consider its implication on all sides. |
| JEL: | D81 D83 L14 L15 |
| Date: | 2021–06 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:28878&r= |
| By: | Matthieu Nadini; Laura Alessandretti; Flavio Di Giacinto; Mauro Martino; Luca Maria Aiello; Andrea Baronchelli |
| Abstract: | Non Fungible Tokens (NFTs) are digital assets that represent objects like art, videos, in-game items and music. They are traded online, often with cryptocurrency, and they are generally encoded as smart contracts on a blockchain. Media and public attention towards NFTs has exploded in 2021, when the NFT art market has experienced record sales while celebrated new star artists. However, little is known about the overall structure and evolution of the NFT market. Here, we analyse data concerning 6.1 million trades of 4.7 million NFTs generating a total trading volume of 935 millions US dollars. Our data are obtained primarily from the Ethereum and WAX blockchains and cover the period between June 23, 2017 and April 27, 2021. First, we characterize the statistical properties of the market. Second, we build the network of interactions and show that traders have bursts of activity followed by inactive periods, and typically specialize on NFTs associated to similar objects. Third, we cluster objects associated to NFTs according to their visual features and show that NFTs within the same category tend to be visually homogeneous. Finally, we investigate the predictability of NFT sales. We use simple machine learning algorithms and find that prices can be best predicted by the sale history of the NFT collection, but also by some features describing the properties of the associated object (e.g., visual features of digital images). We anticipate that our analysis will be of interest to both researchers and practitioners and will spark further research on the NFT production, adoption and trading in different contexts. |
| Date: | 2021–06 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2106.00647&r= |
| By: | Gorwa, Robert |
| Abstract: | Policy proposals for higher rules and standards governing how major user- generated content platforms like Facebook, Twitter, and YouTube moderate socially problematic content have become increasingly prevalent since the negotiation of the German Network Enforcement Act (NetzDG) in 2017. Although a growing body of scholarship has emerged to assess the normative and legal dimensions of these regulatory developments in Germany and beyond, the legal scholarship on intermediary liability leaves key questions about why and how these policies are developed, shaped, and adopted unanswered. The goal of this article is thus to provide a deep case study into the NetzDG from a regulatory politics perspective, highlighting the importance of political and regulatory factors currently under-explored in the burgeoning interdisciplinary literatures on platform governance and platform regulation. The empirical account presented here, which draws on 30 interviews with stakeholders involved in the debate around the NetzDG’s adoption, as well as hundreds of pages of deliberative documents obtained via freedom of information access requests, outlines how the NetzDG took shape, and how it overcame various significant obstacles (ranging from resistance from other stakeholders and the European Union’s frameworks against regulatory fragmentation) to eventually become law. The article argues, throughout this case study, that both domestic politics and transnational institutional constraints are crucial policy factors that should receive more attention as an important part of platform regulation debates. |
| Date: | 2021–05–31 |
| URL: | http://d.repec.org/n?u=RePEc:osf:socarx:2exrw&r= |
| By: | Basten, Christoph; Ongena, Steven |
| Abstract: | How does banks' geographical footprint change when a FinTech platform allows offering mortgages to regions without branch presence? Unique data on responses from different banks to each household yield three salient findings: First, banks offer 4% more often and 6 basis points cheaper when markets have high versus low concentration, implying more profitable follow-on business. Second, they offer 2% more often and 2 bps cheaper when unemployment or house price growth in the applicant's state are one standard deviation less correlated with those at home, improving portfolio diversification. Third, these offers are increasingly automated, using available hard information more efficiently. |
| Keywords: | Banking Automation; Bartik instrument; Credit Risk Diversification; Fintech; Mortgage lending; Online Pricing; Pandemic; spatial competition |
| JEL: | G2 L1 R3 |
| Date: | 2020–06 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:14918&r= |
| By: | Xu, Tao |
| Abstract: | This paper applies the Digital Retail Development Index, matching employment statistics from 2010 to 2019, to empirically analyze the relationship between the development of digital retailing and employment. Considering endogenous factors, the paper proves that the development of digital retailing plays a significant positive role in promoting popular employment and that production, logistics, service, transaction and environment of digital retailing are positively correlated with employment. Based on mechanism analysis, the paper finds that the optimization of logistics, service and transaction is closely related to the improvement of employment, which reflects the ecosystem and experience of digital retailing. |
| Keywords: | Digital retailing; Employment; New retailing |
| JEL: | E2 J21 O32 |
| Date: | 2020–11–01 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:108096&r= |
| By: | Ellegård, Lina Maria (Dept of Economics, Lund University, Sweden); Kjellsson, Gustav (Department of Economics, School of Business, Economics and Law, Göteborg University); Mattisson, Linn (Dept of Economics, Lund University, Sweden) |
| Abstract: | The emergence of markets for online physician consultations -- direct-to-consumers telemedicine (DCT) -- is transforming healthcare services in many nations. The convenience of DCT lowers the cost of seeking care, thus potentially increasing demand. Yet, it is not known whether patients consuming online care turn to traditional providers as well. This is one of the first studies to causally assess to which degree online physician consultations substitute for in-person consultations. We exploit the rapid emergence of a DCT market and exogenous changes in patient fees in a fuzzy difference-in-discontinuities analysis of young adults in two Swedish regions. We find evidence in support of partial substitution and an increase in total physician consultations. |
| Keywords: | telemedicine; primary health care; co-payments; regression discontinuity design |
| JEL: | I11 I12 I18 |
| Date: | 2021–06 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:gunwpe:0808&r= |
| By: | Kosior, Katarzyna |
| Abstract: | The article aims to contribute to the discussion and research on economic, ethical and legal aspects of digital transformation in the agri-food sector. The previous technological revolution (the so-called Green Revolution) significantly raised the efficiency indices and productivity in agriculture. At the same time, however, it led to many negative environmental consequences. It also deepened income inequalities in the sector. According to some researchers, the current digital revolution, in fact based on intensive use of knowledge, may reverse the adverse consequences of the previous revolution. On the other hand, there is growing evidence that digital technologies lead to new social divides and to greater inequalities in the world. Many digital products and services are developed with the use of data to which ownership rights remain unclear. At the same time, the ongoing digitalization processes seem to significantly increase the risk of privacy violations. The article discusses the benefits, problems and possible risks associated with the digitalization processes in the agri-food sector. Particular attention is devoted to the ethical aspects of collecting, processing, sharing and using digital data from smart farming systems. It is argued that the potential of the digital revolution in the agri-food sector is not fully realized. The influencing factors are i.a. the lack of laws and regulatory frameworks for the governance of digital data gathered in the agriculture and food sector, the structure of the market of digital products and services favoring large and very large farms, low level of trust between actors in the data value chain and insufficient cooperation between the private and the public sector with regard to using and sharing digital data. Therefore, a broad discussion engaging various stakeholders on the vision of digital transformation in the agri-food sector is necessary. The foundations for the development of the agri-food sector based on data exchange and digital innovation should take into account common values and ethical principles, as well as the need to build mutual trust between the actors in the data value chain. |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:ags:iafepa:311227&r= |
| By: | Daniel Garcia; Juha Tolvanen; Alexander K. Wagner |
| Abstract: | We provide a new framework to identify demand elasticities in markets where managers rely on algorithmic recommendations for price setting, and apply it to a dataset containing bookings for a sample of mid-sized hotels in Europe. Using non-binding algorithmic price recommendations and observed delay in price adjustments by decision makers, we demonstrate that a control-function approach, combined with state-of-the-art model selection techniques, can be used to isolate exogenous price variation and identify demand elasticities across hotel room types and over time. We confirm these elasticity estimates with a difference-in-differences approach that leverages the same delays in price adjustments by decision makers. However, the difference-in-differences estimates are more noisy and only yield consistent estimates if data is pooled across hotels. We then apply our control-function approach to two classic questions in the dynamic pricing literature: the evolution of price elasticity of demand over time as well as the effects of a transitory price change on future demand due to the presence of strategic buyers. Finally, we discuss how our empirical framework can be applied directly to other decision-making situations in which recommendation systems are used. |
| Keywords: | big data, causal inference, machine learning, revenue management, price recommendations, demand estimation |
| JEL: | L13 L83 D12 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_9127&r= |
| By: | Campbell-Verduyn, Malcolm |
| Abstract: | Meeting on the second anniversary of the Paris Agreement signing in 2017, the United Nations Climate Change Secretariat founded the Climate Chain Coalition (CCC). Backed by a number of multi-stakeholder groups like the Blockchain for Climate Foundation, the Ottawa-based CCC promotes the 'blockchainization' of the Paris Agreement. What kind of 'cooler' world do blockchain-based climate governance projects conjure? This paper scrutinizes the shared visions materializing across climate finance experiments, locating them largely within existing individualistic imaginaries rather than more collectivistic alternatives. It finds the imaginaries of 'cool' technological experimentation to fall short in materializing broader input and more effective output required to overcome the legitimacy crisis facing market-led climate governance. |
| Keywords: | Blockchain,Technology,Finance,Governance,Legitimacy |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:khkgcr:28&r= |
| By: | Heng Chen; Matthew Strathearn; Marcel Voia |
| Abstract: | Constructing a novel micro-geographic individual-level data set, we study the relevance of shoe-leather costs on cash withdrawals. An unexplored issue in the literature is the consistent estimation of the marginal effect of travel distance on withdrawals when a fraction of unobserved withdrawals have free/low shoe-leather cost; i.e., consumers withdraw upon conveniently encountering a free/low cost withdrawal opportunity. To overcome this challenge, we propose a classification technique to identify respondents who have incurred these free/low cost withdrawals, and subsequently account for such endogenous selection from the exclusion restriction of the adoption of recent online financial innovations. We find that there exist significant threshold effects of distance on typical monthly withdrawal frequency. For respondents living within 1.56 kilometers of their affiliated financial institution, a one-kilometer reduction in distance is associated with an average marginal increase of 0.31 withdrawals per month. In terms of heterogeneous effects, distance plays a larger role in higher-income and older-age cohorts. These results are robust to various econometric specifications. |
| Keywords: | Bank notes; Digital currency and fintech |
| JEL: | G21 R22 |
| Date: | 2021–06 |
| URL: | http://d.repec.org/n?u=RePEc:bca:bocawp:21-28&r= |
| By: | Zhiqiang Lu; Junjie Wu; Hongyu Li; Duc Khuong Nguyen |
| Abstract: | This paper investigates the impact of local banks and digital financial inclusion on small and medium enterprise (SME) financing constraints. Using data of Chinese SMEs for the period 2007?2017, our robust results find (1) SMEs financing constraints are negatively associated with the proportion of local bank branches and the degree of digital financial inclusion; (2) the effect of local banks is more pronounced for small, transparent, and firms in the regions less dependent on bank credit; and (3) local bank branches and digital financial inclusion have a substitution effect on alleviating SMEs financial constraints. The findings shed light on how digital finance technologies could influence traditional SME-bank relationship and have important policy and managerial implications. |
| Keywords: | local banks; digital financial inclusion; financing constraints; SMEs; China. |
| Date: | 2021–01–01 |
| URL: | http://d.repec.org/n?u=RePEc:ipg:wpaper:2021-008&r= |
| By: | Maureen Were; Maureen Odongo; Caroline Israel |
| Abstract: | Although Tanzania has made notable progress in enhancing access to financial services, the gender gap in financial inclusion persists. This paper examines gender disparities in financial inclusion in Tanzania using descriptive and regression analyses. While the advent of mobile phone money services has led to increased access to formal financial services, women still lag behind in access to and utilization of formal financial services. |
| Keywords: | Gender, Financial inclusion, Mobile money, Tanzania |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:unu:wpaper:wp-2021-97&r= |
| By: | Julienne, Hannah; Barjaková, Martina; Robertson, Deirdre; Lunn, Pete |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:esr:wpaper:rb202106&r= |
| By: | Carlos Carrion; Zenan Wang; Harikesh Nair; Xianghong Luo; Yulin Lei; Xiliang Lin; Wenlong Chen; Qiyu Hu; Changping Peng; Yongjun Bao; Weipeng Yan |
| Abstract: | In e-commerce platforms, sponsored and non-sponsored content are jointly displayed to users and both may interactively influence their engagement behavior. The former content helps advertisers achieve their marketing goals and provides a stream of ad revenue to the platform. The latter content contributes to users' engagement with the platform, which is key to its long-term health. A burning issue for e-commerce platform design is how to blend advertising with content in a way that respects these interactions and balances these multiple business objectives. This paper describes a system developed for this purpose in the context of blending personalized sponsored content with non-sponsored content on the product detail pages of JD.COM, an e-commerce company. This system has three key features: (1) Optimization of multiple competing business objectives through a new virtual bids approach and the expressiveness of the latent, implicit valuation of the platform for the multiple objectives via these virtual bids. (2) Modeling of users' click behavior as a function of their characteristics, the individual characteristics of each sponsored content and the influence exerted by other sponsored and non-sponsored content displayed alongside through a deep learning approach; (3) Consideration of externalities in the allocation of ads, thereby making it directly compatible with a Vickrey-Clarke-Groves (VCG) auction scheme for the computation of payments in the presence of these externalities. The system is currently deployed and serving all traffic through JD.COM's mobile application. Experiments demonstrating the performance and advantages of the system are presented. |
| Date: | 2021–05 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2105.13556&r= |
| By: | Evensen, Charlotte Bjørnhaug (Dept. of Economics, Norwegian School of Economics and Business Administration); Haugen, Atle (Dept. of Economics, Norwegian School of Economics and Business Administration) |
| Abstract: | Abstract In this paper, we address how targeting and consumer multi-homing impact platform competition and market equilibria in two-sided markets. We analyze platforms that are financed by both advertising and subscription fees, and let them adopt a targeting technology with increasing performance in audience size: a larger audience generates more consumer data, which improves the platforms’ targeting ability and allows them to extract more ad revenues. Targeting therefore increases the importance of attracting consumers. Previous literature has shown that this could result in fierce price competition if consumers subscribe to only one platform (i.e. single-home). Surprisingly, we find that pure single-homing possibly does not constitute a Nash equilibrium. Instead, platforms might rationally set prices that induce consumers to subscribe to more than one platform (i.e. multi-home). With multi-homing, a platform’s audience size is not restricted by the number of subscribers on rival platforms. Hence, multi-homing softens the competition over consumers. We show that this might imply that equilibrium profit is higher with than without targeting, in sharp contrast to what previous literature predicts. |
| Keywords: | Two-sided markets; digital platforms; targeted advertising; incremental pricing; consumer multi-homing. |
| JEL: | D11 D21 L13 L82 |
| Date: | 2021–06–10 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:nhheco:2021_013&r= |
| By: | Ruiqing Cao; Rembrand M. Koning; Ramana Nanda |
| Abstract: | Using data from a prominent online platform for launching new digital products, we document that the composition of the platform's ‘beta testers’ on the day a new product is launched has a systematic and persistent impact on the venture's success. Specifically, we use word embedding methods to classify products on this platform as more or less focused on the needs of female customers. We then show that female-focused products launched on a typical day – when nine in ten users on the platform are men – experience 45% less growth in the year after launch. By isolating exogenous variation in the composition of beta testers unrelated to the characteristics of launched products on that day, we find that on days when there are unexpectedly more women, this gender-product gap shrinks towards zero. Further, consistent with a sampling bias mechanism, we find that the composition of beta testers appears to impact VC decision making and the entrepreneur's subsequent product development efforts. Overall, our findings suggest that the composition of early users can induce systematic biases in the signals of startup potential, with consequential effects – including a shortage of innovations aimed at consumers who are underrepresented among early users. |
| JEL: | L1 M13 O3 |
| Date: | 2021–06 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:28882&r= |
| By: | Benjamin T. Leyden |
| Abstract: | A lack of platform-level competition among digital marketplaces can result in socially inefficient platform design and meaningful welfare losses, even independent of actively anticompetitive behavior. To illustrate the first-order effects platform design can have on competitive outcomes, I investigate how the longstanding design of the product ratings system on Apple’s App Store affected innovative behavior by platform participants. I leverage an exogenous change in this system to show that for nearly a decade, the design of the App Store’s product ratings system led to less frequent product updating by high-quality products. I provide suggestive evidence that this policy resulted in lost, as opposed to simply delayed, innovation. |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_9113&r= |
| By: | Sam Jones; Ivan Manhique |
| Abstract: | Despite the severe negative economic shock associated with the COVID-19 pandemic, evidence from many contexts points to a surge in sales on online platforms, as well as shifts in the composition of demand. This paper investigates how the pandemic has affected both the supply of and demand for informal manual freelancers in Mozambique. Using data from the digital labour marketplace Biscate , we quantify dynamics along four main dimensions: responses to infection rates, official restrictions on activity, changes in workplace mobility, and employment conditions. |
| Keywords: | COVID-19, Shocks, Mozambique, Informal sector |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:unu:wpaper:wp-2021-95&r= |