nep-pay New Economics Papers
on Payment Systems and Financial Technology
Issue of 2021‒10‒04
23 papers chosen by

  1. La transformación en el uso de efectivo y pagos digitales durante la pandemia de Covid-19 By Batiz-Lazo, Bernardo; Bautista-González, Manuel A; González-Correa, Ignacio
  2. MiningVis: Visual Analytics of the Bitcoin Mining Economy By Natkamon Tovanich; Nicolas Soulié; Nicolas Heulot; Petra Isenberg
  3. Welcome to the (digital) jungle: Measuring online platform diffusion By Hélia Costa; Giuseppe Nicoletti; Mauro Pisu; Christina von Rueden
  4. Is Islamic Finance Evolving Into Fintech and Blockchain: A Bibliometric Analysis By Ahmet Aysan; Ibrahim Musa Unal
  5. Periodicity in Cryptocurrency Volatility and Liquidity By Peter Reinhard Hansen; Chan Kim; Wade Kimbrough
  6. Automated Market-Making for Fiat Currencies By Alex Lipton; Artur Sepp
  7. Bitcoin Volatility and Intrinsic Time Using Double Subordinated Levy Processes By Abootaleb Shirvani; Stefan Mittnik; W. Brent Lindquist; Svetlozar T. Rachev
  8. Blockchain technology in supply chains: What are the opportunities for sustainable development? By Krings, Katharina; Schwab, Jakob
  9. Blockchains nachhaltig gestalten: Vorschlag von nachhaltigkeitsorientierten Entscheidungskriterien und eines Verfahrenskonzepts für die Umsetzung staatlich geförderter oder initiierter Projekte im Bereich Blockchain By Ramesohl, Stephan; Lauten-Weiss, Julian; Kobiela, Georg
  10. Are online platforms killing the offline star? Platform diffusion and the productivity of traditional firms By Hélia Costa; Giuseppe Nicoletti; Mauro Pisu; Christina von Rueden
  11. Causal effect of regulated Bitcoin futures on volatility and volume By Fiammetta Menchetti; Fabrizio Cipollini; Fabrizia Mealli
  12. Epidemic exposure, financial technology, and the digital divide By Saka, Orkun; Eichengreen, Barry; Aksoy, Cevat Giray
  13. Decentralized lending and its users: Insights from Compound By Kanis Saengchote
  14. Diversification Among Cryptoassets: Bitcoin Maximalism, Active Portfolio Management, and Survival Bias By Weizhi Sun; Ladislav Kristoufek
  15. Blockchain-Technologie in Lieferketten: Welche Chancen bietet sie für nachhaltige Entwicklung? By Krings, Katharina; Schwab, Jakob
  16. Psychological dimension of adaptive trading in cryptocurrency markets By Misha Perepelitsa
  17. Cournot Platform Competition with Mixed-Homing By Mark J. TREMBLAY; Takanori ADACHI; Susumu SATO
  18. Wege in eine ökologische Machine Economy: Wir brauchen eine 'Grüne Governance der Machine Economy', um das Zusammenspiel von Internet of Things, Künstlicher Intelligenz und Distributed Ledger Technology ökologisch zu gestalten By Wurm, Daniel; Zielinski, Oliver; Lübben, Neeske; Jansen, Maike; Ramesohl, Stephan
  19. Money and cooperation in small communities By So Kubota
  20. How do workers adjust when firms adopt new technologies? By Genz, Sabrina; Gregory, Terry; Janser, Markus; Lehmer, Florian; Matthes, Britta
  21. Measuring Police Presence in US Cities using Smartphone Data By M. Keith Chen; Katherine L. Christensen; Elicia John; Emily Owens; Yilin Zhuo
  22. Peer Monitoring vs. Search Costs in the Interbank Market: Evidence from Payment Flow Data in Norway By Jon H. Findreng
  23. Money Creation and Banking: Theory and Evidence By Heon Lee

  1. By: Batiz-Lazo, Bernardo; Bautista-González, Manuel A; González-Correa, Ignacio
    Abstract: Resumen: No hay evidencia sustancial de que la pandemia de Covid-19 represente un cambio estructural hacia una economía sin efectivo (cashless) en el sector de pagos minoristas. En el corto plazo, los consumidores aumentaron su volumen de pagos digitales y sin contacto (contactless) como respuesta a los confinamientos y creencias de que el efectivo podría propagar el virus. Sin embargo, lo anterior no ha resultado en una reducción permanente en el uso o eliminación de billetes y monedas. Además, en muchos países se observó la “paradoja del efectivo”, es decir, una disminución del efectivo como medio de pago y, simultáneamente un alza en su demanda precautoria ante la incertidumbre y el deterioro en las expectativas económicas.
    Abstract: Definitive and uncontroversial evidence is yet to emerge that the Covid-19 pandemic brought about a structural shift to a cashless economy in the retail payments sector. In the short term, consumers increased their volume of digital and contactless payments in response to lockdowns and beliefs that cash could spread the virus. However, this has not resulted in a permanent reduction in the usage or elimination of banknotes and coins. Moreover, there was a “cash paradox” in many countries, i.e., a decrease in the demand of banknotes as means of payment and, simultaneously, a rise in its precautionary demand of cash given consumers’ heightened uncertainty and the deterioration of economic expectations.
    Keywords: Keywords: cash, cashless economy, cashless society, banknotes and coins, digital payments, Covid-19 pandemic, retail payments, Spain, United States, United Kingdom, Mexico. Palabras Clave: efectivo, economía sin efectivo, sociedad sin efectivo, billetes y monedas, pagos digitales, pandemia de Covid-19, sistema de pagos minorista, España, Estados Unidos, Reino Unido, México.
    JEL: E40 G20 L81 N20
    Date: 2021–09
  2. By: Natkamon Tovanich (IRT SystemX - IRT SystemX, AVIZ - Analysis and Visualization - Inria Saclay - Ile de France - Inria - Institut National de Recherche en Informatique et en Automatique - LISN - Laboratoire Interdisciplinaire des Sciences du Numérique - Université Paris-Saclay - CNRS - Centre National de la Recherche Scientifique - CentraleSupélec - IaH - Interaction avec l'Humain - LISN - Laboratoire Interdisciplinaire des Sciences du Numérique - Université Paris-Saclay - CNRS - Centre National de la Recherche Scientifique - CentraleSupélec); Nicolas Soulié (DEFI - Département Droit, Economie et Finances - IMT - Institut Mines-Télécom [Paris] - TEM - Télécom Ecole de Management - IMT-BS - Institut Mines-Télécom Business School, LITEM - Laboratoire en Innovation, Technologies, Economie et Management (EA 7363) - UEVE - Université d'Évry-Val-d'Essonne - Université Paris-Saclay - IMT-BS - Institut Mines-Télécom Business School); Nicolas Heulot (IRT SystemX - IRT SystemX); Petra Isenberg (AVIZ - Analysis and Visualization - Inria Saclay - Ile de France - Inria - Institut National de Recherche en Informatique et en Automatique - LISN - Laboratoire Interdisciplinaire des Sciences du Numérique - Université Paris-Saclay - CNRS - Centre National de la Recherche Scientifique - CentraleSupélec - IaH - Interaction avec l'Humain - LISN - Laboratoire Interdisciplinaire des Sciences du Numérique - Université Paris-Saclay - CNRS - Centre National de la Recherche Scientifique - CentraleSupélec)
    Abstract: We present a visual analytics tool, MiningVis, to explore the long-term historical evolution and dynamics of the Bitcoin mining ecosystem. Bitcoin is a cryptocurrency that attracts much attention but remains difficult to understand. Particularly important to the success, stability, and security of Bitcoin is a component of the system called "mining.'' Miners are responsible for validating transactions and are incentivized to participate by the promise of a monetary reward. Mining pools have emerged as collectives of miners that ensure a more stable and predictable income. MiningVis aims to help analysts understand the evolution and dynamics of the Bitcoin mining ecosystem, including mining market statistics, multi-measure mining pool rankings, and pool hopping behavior. Each of these features can be compared to external data concerning pool characteristics and Bitcoin news. In order to assess the value of MiningVis, we conducted online interviews and insight-based user studies with Bitcoin miners. We describe research questions tackled and insights made by our participants and illustrate practical implications for visual analytics systems for Bitcoin mining.
    Keywords: Visual analytics,Bitcoin,Bitcoin mining,Mining pools,Pool hopping
    Date: 2021
  3. By: Hélia Costa; Giuseppe Nicoletti; Mauro Pisu; Christina von Rueden
    Abstract: Despite the rising importance and economy-wide effects of online platforms, the paucity of cross-country comparable data still hampers understanding of the structural and policy determinants of their diffusion. This study contributes to the understanding of multi-sided online platforms in three main ways. First, we build a harmonised international dataset of online platforms and their use across 43 OECD and G20 countries, covering the 2013-19 period and nine areas of activity. Second, we describe main trends in the use of platforms in the past years, and third, we investigate the structural and policy determinants of online platforms diffusion across countries and over time.
    Keywords: Data collection, digitalisation, online platforms
    JEL: C80 M20 O33
    Date: 2021–10–05
  4. By: Ahmet Aysan (HBKU - Hamad Bin Khalifa University); Ibrahim Musa Unal (HBKU - Hamad Bin Khalifa University)
    Abstract: This paper conducts a bibliometric research in the literature on Fintech and Islamic finance. The data of this study consists of relevant articles obtained from the Scopus database as of February 2021. A keywords bundle related to Islamic finance and keyword has been used for the search, resulting in 89 publishments included in this research. Results show the stunning increase in the Islamic Fintech publishments after 2017, mainly in the fields of cryptocurrencies, micro-finance, impact investing, and SRI investing, and so on. The two main centers of Islamic Fintech research are Malaysia-Indonesia Region and the GCC area. The increasing number of Islamic Fintech publishments show the potential of the field for the industry's future.
    Keywords: blockchain,cryptocurrency,bibliometric,Islamic,Fintech
    Date: 2021
  5. By: Peter Reinhard Hansen; Chan Kim; Wade Kimbrough
    Abstract: We study recurrent patterns in volatility and volume for major cryptocurrencies, Bitcoin and Ether, using data from two centralized exchanges (Coinbase Pro and Binance) and a decentralized exchange (Uniswap V2). We find systematic patterns in both volatility and volume across day-of-the-week, hour-of-the-day, and within the hour. These patterns have grown stronger over the years and can be related to algorithmic trading and funding times in futures markets. We also document that price formation mainly takes place on the centralized exchanges while price adjustments on the decentralized exchanges can be sluggish.
    Date: 2021–09
  6. By: Alex Lipton; Artur Sepp
    Abstract: We present an automated market-making (AMM) cross-settlement mechanism for digital assets on interoperable blockchains, focusing on central bank digital currencies (CBDCs) and stable coins. We develop an innovative approach for generating fair exchange rates for on-chain assets consistent with traditional off-chain markets. We illustrate the efficacy of our approach on realized FX rates for G-10 currencies.
    Date: 2021–09
  7. By: Abootaleb Shirvani; Stefan Mittnik; W. Brent Lindquist; Svetlozar T. Rachev
    Abstract: We propose a doubly subordinated Levy process, NDIG, to model the time series properties of the cryptocurrency bitcoin. NDIG captures the skew and fat-tailed properties of bitcoin prices and gives rise to an arbitrage free, option pricing model. In this framework we derive two bitcoin volatility measures. The first combines NDIG option pricing with the Cboe VIX model to compute an implied volatility; the second uses the volatility of the unit time increment of the NDIG model. Both are compared to a volatility based upon historical standard deviation. With appropriate linear scaling, the NDIG process perfectly captures observed, in-sample, volatility.
    Date: 2021–09
  8. By: Krings, Katharina; Schwab, Jakob
    Abstract: While blockchain technology (BT) has gained a great deal of publicity for its use in cryptocurrencies, another area of BT application has emerged away from the public eye, namely supply chains. Due to the increasing fragmentation and globalisation of supply chains in recent years, many products have to pass through countless production steps worldwide (from raw material extraction to the point of sale). Ensuring the quality and sustainability of production in preceding steps is a major challenge for many firms and thus, ultimately, also for the consumer. BT offers potential for achieving significant progress on this front. Put simply, the blockchain makes it possible to verify data decentralised within a network, store it in a tamper-proof and traceable format and make it accessible to all members of a network. The potential benefits of BT lie firstly with the consumer, who is able to trace the origin of products, which makes sustainable purchases easier. Secondly, BT enables producers to automate parts of their supply chains and to verify cost effectively the quality and origin of their products. Thirdly, there are hopes that BT could make supply chains more inclusive for small and medium-sized suppliers, especially in developing countries. BT also offers a means of more easily creating confidence in intermediate goods supplied, thereby dismantling barriers to entry. Taken together, BT could thus help to make consumption and production more environmentally friendly, socially equitable and inclusive, and thereby foster sustainable development. So far, pilot projects have received investment primarily from very large companies. Both the firms and their consumers can now audit a number of products in real time for manufacturing method and origin. While BT can securely store and chain together the inputted data, it cannot yet guarantee the accuracy of that data. This remaining challenge regarding the digital-analogue link could be addressed through links with other technologies, such as the Internet of Things (IoT). However, independent analogue audits are still the only means in most cases of checking compliance with labour, environmental, animal-welfare and other relevant standards. Consequently, the use of BT offers substantial potential benefits for sectors in which the digital-analogue link can be effectively bridged, such as the food and high-quality commodities sectors. Small-scale suppliers in developing countries also frequently lack the digital education, equipment and infrastructure needed in order to deploy BT. This is where national and international development policy is needed to leverage the benefits of BT solutions for inclusive production. General technological standards can also help to counteract the monopolisation of technological developments by multinational concerns. In this way, policy-makers could help to harmonise the interests of consumers and producers with those of small and medium-sized enterprises (SMEs) in the supply chain.
    Date: 2021
  9. By: Ramesohl, Stephan; Lauten-Weiss, Julian; Kobiela, Georg
    Abstract: Mit der Blockchain - und allgemein mit Distributed-Ledger-Technologien (DLT) - werden große Erwartungen verknüpft, die Prozesse der digitalen Welt des 21. Jahrhunderts neu zu organisieren, effizienter zu gestalten und bislang ungekannte Möglichkeiten für Transaktionen zwischen Beteiligten in Wirtschaft, Gesellschaft und Verwaltung zu ermöglichen. Diese Chancen müssen genutzt werden. Gleichzeitig ist mit der Blockchain-Technologie wie mit allen anderen digitalen Lösungen die Herausforderung verbunden, die Technologien, Anwendungen und zugrundeliegenden Infrastrukturen nachhaltig zu gestalten und an Energieeffizienz, Klimaschutz und Ressourcenschonung auszurichten. Handlungsbedarf besteht auch bei Blockchain-Anwendungen. Der Energieverbrauch des derzeit größten Blockchain-Netzwerks Bitcoin wird auf bis über 130 TWh/Jahr abgeschätzt, womit eine Größenordnung in Höhe des gesamten Jahresstrombedarfs von Ländern wie Argentinien erreicht würde. Blockchain-Anwendungen sind somit schon heute umweltpolitisch relevante Einflussgrößen und die zu erwartende Wachstumsdynamik erhöht den Handlungsdruck. Es ist das Ziel dieser Kurzstudie, geeignete Nachhaltigkeitskriterien zur Bewertung der Energieverbräuche und Umweltwirkungen von Blockchain-Anwendungen zu identifizieren sowie ein erstes Konzept für deren Implementierung bei der Umsetzung und Vergabe staatlich geförderter oder initiierter Projekte vorzuschlagen.
    Date: 2021
  10. By: Hélia Costa; Giuseppe Nicoletti; Mauro Pisu; Christina von Rueden
    Abstract: Online platform use has grown remarkably in the last decade. Despite this, our understanding of its implications for economic outcomes is scarce and often limited to case studies and advanced countries. Using a newly built harmonised international dataset of online platforms and their use across 43 countries, covering the 2013-18 period and seven areas of activity, we contribute to filling this gap. Specifically, we investigate whether and under which market conditions platform uptake leads to changes in incumbent firms’ productivity. We find that platform use increases labour productivity growth in firms operating in the same sector, and that this takes place through increases in value added growth as opposed to decreases in employment. What is more, productivity gains are greater for small firms and firms in the middle of the productivity distribution, suggesting that online platforms can play an important role in levelling the playing field between SMEs and large companies and in narrowing productivity gaps among firms. Finally, productivity gains are stronger in more dynamic platform markets. Our findings offer insights on factors and policies that can be leveraged to encourage platform development in ways that are beneficial for the economy.
    Keywords: digitalisation, firm behaviour, online platforms, Productivity
    JEL: D22 D24 O33 O47
    Date: 2021–10–05
  11. By: Fiammetta Menchetti; Fabrizio Cipollini; Fabrizia Mealli
    Abstract: In December 2017, two leading derivative exchanges, CBOE and CME, introduced the first regulated Bitcoin futures. Our aim is estimating their causal impact on Bitcoin volatility and trading volume. Employing a new causal approach, C-ARIMA, we find that the CME future triggered an increase in both outcomes. There is also evidence of a positive volume-volatility relationship and that the effect on volatility was partially due to the higher trading volumes induced by the launch of the contract. After controlling for the effect on volumes, we find that the CME instrument caused Bitcoin volatility to increase by more than double.
    Date: 2021–09
  12. By: Saka, Orkun; Eichengreen, Barry; Aksoy, Cevat Giray
    Abstract: We ask whether epidemic exposure leads to a shift in financial technology usage and who participates in this shift. We exploit a dataset combining Gallup World Polls and Global Findex surveys for some 250,000 individuals in 140 countries, merging them with information on the incidence of epidemics and local 3G internet infrastructure. Epidemic exposure is associated with an increase in remote-access (online/mobile) banking and substitution from bank branch-based to ATM activity. Heterogeneity in response centers on the age, income and employment of respondents. Young, high-income earners in full-time employment have the greatest tendency to shift to online/mobile transactions in response to epidemics. These effects are larger for individuals with better ex ante 3G signal coverage, highlighting the role of the digital divide in adaption to new technologies necessitated by adverse external shocks.
    JEL: G20 G59 I10
    Date: 2021–09–28
  13. By: Kanis Saengchote (Chulalongkorn University)
    Abstract: Decentralized finance (DeFi) has recently gained much attention and scrutiny because of its rapid growth. DeFi services replicate traditional financial services such as lending, exchange, and asset management, but they are currently unregulated, unlike their traditional counterparts. We investigate Compound – one of the earliest and largest DeFi lending protocol – to show how it works, who the users are and the potential motivations behind their uses. We find that the loan durations are short (31 days on average), borrowing rates volatile and borrowers are concerned about liquidation risk. Further analyses reveal that some loan demand may arise from leveraged investment strategies. Taken together with the tacit leverage in DeFi yield farming, further availability of on-chain lending could potentially transpire into DeFi systemic risk.
    Keywords: DeFi, Lending, Incentives
    JEL: G10 G21
    Date: 2021–09
  14. By: Weizhi Sun (Institute of Economic Studies, Faculty of Social Sciences, Charles University, Opletalova 26, 110 00, Prague, Czech Republic); Ladislav Kristoufek (Institute of Economic Studies, Faculty of Social Sciences, Charles University & The Czech Academy of Sciences, Institute of Information Theory and Automation, Prague, Czech Republic)
    Abstract: Cryptoassets, particularly Bitcoin, have attracted the attention of institutional investors during the latest price rallies of 2020 and 2021. The need for cryptoassets apart from Bitcoin in their portfolios is mostly unexplored in the current literature, and the general perception of diversification benefits within cryptomarkets mostly builds on popular beliefs. The current study is a deep dive into active and passive investment strategies focusing on specifics of cryptoassets, the most important of which is the survival bias in the portfolio dataset construction and its implications. We show that survival bias does in fact drive the results at their very core and that the differences between using the backward-looking subset of assets and actual assets available at the time of portfolio construction are substantial and lead to completely different implications and investment suggestions. It turns out that active portfolio management does not pay off in most instances compared to simply holding Bitcoin.
    Keywords: cryptocurrencies, cryptoassets, Bitcoin, diversification, portfolio management, survival bias
    JEL: G11 G15 G19 G23
    Date: 2021–09
  15. By: Krings, Katharina; Schwab, Jakob
    Abstract: Neben der Aufmerksamkeit, die der Blockchain-Technologie (BT) durch ihren Einsatz in Kryptowährungen zuteilwurde, hat sich für die BT einigermaßen unbemerkt von der Öffentlichkeit ein weiteres Einsatz-feld entwickelt: das in der Lieferkette. Lieferketten sind in den vergangenen Jahren immer fragmentierter und globaler geworden, sodass Produkte von der Rohstoffgewinnung häufig bis zum Verkauf unzählige Produktionsschritte durchlaufen, die von Firmen in unterschiedlichen Ländern durchgeführt werden. Die Sicherung der Qualität und Nachhaltigkeit der Produktion in vorangehenden Schritten stellt für viele folgende Produktionsschritte - und so letztlich auch für die Endverbraucher - eine große Herausforderung dar. Die BT verspricht in diesem Zusammenhang große Fortschritte. Einfach gesagt ermöglicht die Blockchain, Daten in einem Netzwerk zu verifizieren, fälschungssicher und rückverfolgbar abzuspeichern und für alle Teilnehmer*innen des Netzwerkes einsehbar zu machen. Die möglichen Vorteile der BT liegen zum einen auf der Seite der Konsument*innen, die die Herkunft von Produkten nachvollziehen können. Das erleichtert nachhaltigen Konsum. Sie liegen zweitens auf der Seite der Produzent*innen, wenn Teile ihrer Lieferketten automatisiert werden und sie ihre Produktqualität und -herkunft kostengünstig nachweisen können. Drittens wird mit der BT die Hoffnung verbunden, dass Lieferketten durch sie inklusiver für kleine und mittelgroße Zulieferer*innen werden können, besonders in Entwicklungsländern. Die BT kann einfacher Vertrauen auch in die von Ihnen gelieferten Zwischengüter schaffen und so Eintrittsbarrieren abbauen. Zusammengenommen könnte die BT daher dazu beitragen, Konsum und Produktion ökologischer, sozial gerechter und inklusiver zu gestalten und so nachhaltige Entwicklung voranzubringen. Bisher haben vor allem sehr große Unternehmen in Pilotprojekte investiert. Einige Produkte können inzwischen sowohl von Firmen als auch von Endverbrauchern in Echtzeit auf ihre Produktionsweise und Herkunft überprüft werden. Während die BT jedoch eingetragene Daten sicher speichert und miteinander 'verkettet', kann die Technologie als solche noch nicht die Korrektheit der eingetragenen Daten sichern. Diese verbleibende Unsicherheit im Digital-Analog-Link kann durch die Verbindung mit anderen Technologien, wie etwa dem Internet der Dinge (Internet of Things, IoT), gestärkt werden. Die Einhaltung etwa von Arbeits-, Umwelt- oder Tierwohlstandards kann aber nach wie vor weitestgehend nur durch unabhängige analoge Audits überprüft werden. Ein Einsatz der BT bringt daher besonders in solchen Sektoren potenziell umfassende Vorteile, in denen der Digital-Analog-Link erfolgreich überbrückt werden kann, wie etwa im Lebensmittelsektor oder bei besonders hochwertigen Rohstoffen. Für den Einsatz der BT auch von kleinen Zuliefer*innen in Entwicklungsländern sind oftmals die nötigen Bedingungen von digitaler Bildung, Ausstattung, und Infrastruktur nicht gegeben. Hier müssten nationale und internationale Entwicklungspolitiken ansetzen, damit BT-Lösungen ihre Vorteile für inklusive Produktion entfalten können. Auch allgemeine technologische Standards können helfen, Monopolbil-dungen in der Technologieentwicklung durch multinationale Konzerne entgegenzuwirken. Damit könnte die Politik dazu beitragen, das Interesse der Konsument*innen und Produzent*innen mit dem der kleinen und mittleren Unternehmen (KMUs) in der Lieferkette in Einklang zu bringen.
    Keywords: Blockchain
    Date: 2020
  16. By: Misha Perepelitsa
    Abstract: In this paper we extend the analysis of an agent-based model for adaptive trading, called asynchronous stochastic price pump (ASPP) introduced by Perepelitsa and Timofeyev (2019), to the model with heterogeneous distribution of psychological parameters of speculative optimism and pessimism across the population of traders. We show that the new model has a range of qualitatively different dynamics when the correlation between those factors ranges from low negative to large positive values. A statistical parameter estimation suggests a heterogeneous ASPP with negative correlation as a model of price variations of Bitcoin.
    Date: 2021–09
  17. By: Mark J. TREMBLAY; Takanori ADACHI; Susumu SATO
    Abstract: Firms in traditional markets often compete in output `a la Cournot. In this paper, we consider Cournot platform competition in two-sided markets with single-, multi-, and mixed-homing allocations and find that the markup and markdown terms are distorted toward zero for (i) greater levels of platform competition and (ii) greater levels of singlehoming. Furthermore, we develop side specific conduct parameters that depend on the underlying platform conduct as well as the homing allocation; these effectively extend the monopoly platform Lerner indices from Armstrong (2006) and Weyl (2010) to the general case of platform competition. Finally, we show that, in utter contrast to the welfare results in traditional Cournot markets, greater Cournot platform competition often decreases welfare across all feasible homing allocations.
    Keywords: Two-sided markets, conduct parameter, network externality, Lerner index,single-homing, multi-homing, mixed-homing.
    JEL: D40 L10 L20 L40
  18. By: Wurm, Daniel; Zielinski, Oliver; Lübben, Neeske; Jansen, Maike; Ramesohl, Stephan
    Abstract: Im Zeitalter der Machine Economy ist der maschinelle Dialog allgegenwärtig - das bietet neue Chancen für Nachhaltigkeit, erhöht gleichzeitig aber durch die zugrundeliegenden Technologien auch den Druck auf unsere Umwelt. Internet of Things (IoT), Künstliche Intelligenz (KI) und Distributed Ledger Technology (DLT) sind das technologische Fundament der Machine Economy. Damit verbunden sind Infrastrukturen, Datenströme und Anwendungen, die hohe Energie- sowie Ressourcenaufwände erzeugen. Der derzeitige politische Diskurs sowie die Nachhaltigkeitsforschung fokussieren sich auf Umweltwirkungen durch digitale Infrastrukturen. Daten, Applikationen sowie die Rolle von Akteuren als Treiber der Umweltwirkung werden zu wenig beleuchtet. In diesem Papier sprechen wir uns für eine 'Grüne Governance der Machine Economy' aus. Adressiert werden Annahmen zu systemübergreifenden Treibern von Umweltbelastungen und ihrer Wirkung. Ziel ist es, ein Gesamtsystem nachhaltiger Entscheidungen und ein ökologisches Zusammenspiel aller beteiligten Technologien in der Wertschöpfung zu ermöglichen. Zukünftige Forschung soll die hier vorgestellten Hypothesen weiter ausarbeiten und konkrete Handlungsoptionen für eine Stakeholder übergreifende Roadmap erarbeiten.
    Date: 2021
  19. By: So Kubota (Faculty of Political Science and Economics, Waseda University, 1-6-1 Nishiwaseda Shinjuku-ku, Tokyo 169-8050, Japan.)
    Abstract: In this note, I investigate the circulation of money in small communities. I build a two-player repeated gift-giving game and then show that players can sustain coopera- tion by using money. An ecient outcome is obtained when players are able to hold multiple units of currency.
    Keywords: primitive money, repeated game.
    JEL: C73 E42 N10
    Date: 2021–09
  20. By: Genz, Sabrina; Gregory, Terry; Janser, Markus; Lehmer, Florian; Matthes, Britta
    Abstract: We investigate how workers adjust to firms' investments into new digital technologies, including artificial intelligence, augmented reality, or 3D printing. For this, we collected novel data that links survey information on firms' technology adoption to administrative social security data. We then compare individual outcomes between workers employed at technology adopters relative to non-adopters. Depending on the type of technology, we find evidence for improved employment stability, higher wage growth, and increased cumulative earnings in response to digital technology adoption. These beneficial adjustments seem to be driven by technologies used by service providers rather than manufacturers. However, the adjustments do not occur equally across worker groups: IT-related expert jobs with non-routine analytic tasks benefit most from technological upgrading, coinciding with highly complex job requirements, but not necessarily with more academic skills.
    Keywords: technological change,artificial intelligence,employment stability,wages
    JEL: J23 J31 J62
    Date: 2021
  21. By: M. Keith Chen; Katherine L. Christensen; Elicia John; Emily Owens; Yilin Zhuo
    Abstract: While extensive, research on policing in America has focused on documented actions such as stops and arrests -- less is known about patrolling and presence. We map the movements of over ten thousand police officers across twenty-three of America's largest cities by combining anonymized smartphone data with station and precinct boundaries. Police spend considerably more time in Black neighborhoods, a disparity which persists after controlling for density, socioeconomics, and crime-driven demand for policing. Our results suggest that roughly half of observed racial disparities in arrests derive from disparities in exposure, and that supervisor (but not officer) diversity reduces this.
    Date: 2021–09
  22. By: Jon H. Findreng
    Abstract: Bilateral payment flows between banks may provide private information about a borrowing bank’s liquidity position. This paper analyses whether private information on the bilateral payment flow of central bank reserves foster peer monitoring or whether the information is used to reduce search costs in the unsecured interbank market. In the former, banks with outflows of liquidity are penalized by their counterparties, while in the latter, these banks benefit through reduced search costs to find a liquidity provider. I use data from Norges Bank’s real time gross settlement system over the period 2012 to 2015 to identify unsecured overnight interbank loans and payment flows. The results suggest that banks are using private information from payment flows to reduce search costs and not for peer monitoring. This has important implications for regulators’ assessment of the pros and cons of a centralized versus a decentralized interbank market.
    Keywords: peer monitoring, search cost, unsecured overnight interbank market, interest rates, central bank liquidity policy, OTC markets
    JEL: G21 E42 E43 E58
    Date: 2021–05–29
  23. By: Heon Lee
    Abstract: This paper develops a monetary-search model where the money multiplier is endogenously determined. I show that when the central bank pays interest on reserves, the money multiplier and the quantity of the reserve can depend on the nominal interest rate and the interest on reserves. The calibrated model can explain the evolution of the money multiplier and the excess reserve-deposit ratio in the pre-2008 and post-2008 periods. The quantitative analysis suggests that the dramatic changes in the money multiplier after 2008 are driven by the introduction of the interest on reserves with a low nominal interest rate.
    Date: 2021–09

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.