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on Payment Systems and Financial Technology |
|
Issue of 2023‒01‒16
forty-five papers chosen by |
| By: | Annetta Ho; Sriram Darbha; Yuliya Gorelkina; Alejandro García |
| Abstract: | Our paper contributes to the discussion about the utility of stablecoins for retail payments through an objective, evidence-based approach that compares stablecoins with traditional retail payment methods. The paper also provides insights that could be useful in the design of central bank digital currencies. We identify the potential benefits, risks and costs of stablecoin arrangements used for retail payments relative to traditional retail payment methods. We select three real-world examples for comparison: (i) a Mastercard credit card payment through a traditional bank; (ii) a Unified Payments Interface fast payment through Paytm (a technology-enabled payments company regulated as a limited-purpose bank); and (iii) a stablecoin retail transaction using USD Coin and a BitPay wallet. We find that certain stablecoin arrangements offer end users greater control of their privacy, facilitate more rapid innovation and have the potential to increase transaction speeds, particularly for cross-border payments. At the same time, stablecoins may provide less consumer protection for fraud, present higher risks to the payment system and to efforts to combat financial crime (partly because of the more nascent regulatory framework), and be costlier relative to traditional payment arrangements. Our findings suggest that stablecoin arrangements do not currently serve as substitutes for the suite of traditional payment arrangements but instead address niche use cases or user segments that value their benefits and can accept their risks or costs. |
| Keywords: | Digital currencies and fintech; Payment clearing and settlement systems |
| JEL: | D78 O38 |
| Date: | 2022–12 |
| URL: | http://d.repec.org/n?u=RePEc:bca:bocadp:22-21&r=pay |
| By: | Franklin Allen (Brevan Howard Centre at Imperial College) |
| Abstract: | Globalization, together with Fintech – in other words, the application of technology to finance – are in the process of revolutionizing the financial services industry. This paper looks at this process in the MENA region and focuses on two sets of countries. The first set comprises the high-income countries of Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the UAE. The second group consists of the middle-income countries of Algeria, Egypt, Iraq, Jordan, Lebanon, Morocco, and Tunisia. Countries can benefit from fintech to differing degrees in terms of the financial inclusion of both households and firms, especially small- and medium-sized enterprises (SMEs). Advances in credit scoring, digital banking, and peer-to-peer lending have the potential to transform banking if properly implemented. Distributed ledger, blockchain, and cryptocurrency technologies have enabled Initial Coin Offerings (ICOs). These can greatly improve the number of start-ups and their subsequent growth. They also enable Central Bank Digital Currencies (CBDCs) that may significantly improve central banks’ effectiveness of intervening in the financial system and economy. Finally, appropriate cybersecurity and financial regulation are needed to ensure that fintech can achieve these improvements. Policymakers should be accommodative towards fintech innovations to obtain their full potential benefit. |
| Date: | 2021–09–20 |
| URL: | http://d.repec.org/n?u=RePEc:erg:wpaper:1489&r=pay |
| By: | Yufan Zhang; Zichao Chen; Yutong Sun; Yulin Liu; Luyao Zhang |
| Abstract: | Decentralized finance (DeFi) is known for its unique mechanism design, which applies smart contracts to facilitate peer-to-peer transactions. The decentralized bank is a typical DeFi application. Ideally, a decentralized bank should be decentralized in the transaction. However, many recent studies have found that decentralized banks have not achieved a significant degree of decentralization. This research conducts a comparative study among mainstream decentralized banks. We apply core-periphery network features analysis using the transaction data from four decentralized banks, Liquity, Aave, MakerDao, and Compound. We extract six features and compare the banks' levels of decentralization cross-sectionally. According to the analysis results, we find that: 1) MakerDao and Compound are more decentralized in the transactions than Aave and Liquity. 2) Although decentralized banking transactions are supposed to be decentralized, the data show that four banks have primary external transaction core addresses such as Huobi, Coinbase, Binance, etc. We also discuss four design features that might affect network decentralization. Our research contributes to the literature at the interface of decentralized finance, financial technology (Fintech), and social network analysis and inspires future protocol designs to live up to the promise of decentralized finance for a truly peer-to-peer transaction network. |
| Date: | 2022–12 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2212.05632&r=pay |
| By: | Dirk Bergemann (Cowles Foundation, Yale University); Alessandro Bonatti |
| Abstract: | We propose a model of intermediated digital markets where data and heterogeneity in tastes and products are defining features. A monopolist platform uses superior data to match consumers and multiproduct advertisers. Consumers have heterogenous preferences for the advertisers' product lines and shop on- or off-platform. The platform monetizes its data by selling targeted advertising space that allows advertisers to tailor their products to each consumer's preferences. We derive the equilibrium product lines and advertising prices. We identify search costs and informational advantages as two sources of the platform's bargaining power. We show that privacy-enhancing data-governance rules, such as those corresponding to federated learning, can lead to welfare gains for the consumers. |
| Keywords: | Data, Privacy, Data Governance, Digital Advertising, Competition, Digital Platforms, Digital Intermediaries, Personal Data, Matching, Price Discrimination |
| JEL: | D18 D44 D82 D83 |
| Date: | 2022–08 |
| URL: | http://d.repec.org/n?u=RePEc:cwl:cwldpp:2343&r=pay |
| By: | Ozili, Peterson K |
| Abstract: | There is little academic interest in embedded finance despite the fact that embedded finance is part of the on-going digital finance revolution. This paper presents an overview of embedded finance. It identifies the applications, use case examples, benefits and challenges of embedded finance. The paper also analyzes global interest in embedded finance and compares it with interest in related finance concepts such as open finance, open banking, decentralized finance, financial innovation, FinTech and digital finance. Granger causality test and two-stage least square regression were used to assess interest over time in embedded finance. The empirical result show that interest in embedded finance increased significantly during the COVID-19 pandemic. The United States, the United Kingdom and India witnessed the highest interest in embedded finance compared to other countries. There is bi-directional Granger causality between interest in information about embedded finance and interest in information about financial innovation. There is uni-directional Granger causality between interest in information about embedded finance and interest in information about digital finance and open finance. The findings also reveal that interest in decentralized finance and open finance are significant determinants of interest in embedded finance. On the other hand, interest in embedded finance is a significant determinant of interest in digital finance, decentralized finance, FinTech and open banking. Also, interest in embedded finance is significantly correlated with interest in digital finance, decentralized finance, open banking and FinTech. |
| Keywords: | Embedded finance, open finance, open banking, decentralized finance, financial innovation, FinTech, digital finance, BaaS, API. |
| JEL: | G21 O31 |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:115775&r=pay |
| By: | Igor Makarov; Antoinette Schoar |
| Abstract: | The paper provides an overview of cryptocurrencies and decentralized finance. The discussion lays out potential benefits and challenges of the new system and presents a comparison to the traditional system of financial intermediation. Our analysis highlights that while the DeFi architecture might have the potential to reduce transaction costs, similar to the traditional financial system, there are several layers where rents can accumulate due to endogenous constraints to competition. We show that the permissionless and pseudonymous design of DeFi generates challenges for enforcing tax compliance, anti-money laundering laws, and preventing financial malfeasance. We highlight ways to regulate the DeFi system which would preserve a majority of benefits of the underlying blockchain architecture but support accountability and regulatory compliance. |
| Keywords: | Decentralized finance, blockchain technology, financial intermediation, system risk |
| JEL: | G12 G15 F38 |
| Date: | 2022–12 |
| URL: | http://d.repec.org/n?u=RePEc:bis:biswps:1061&r=pay |
| By: | Nam, Rachel J. |
| Abstract: | With open banking, consumers take greater control over their own financial data and share it at their discretion. Using a rich set of loan application data from the largest German FinTech lender in consumer credit, this paper studies what characterizes borrowers who share data and assesses its impact on loan application outcomes. I show that riskier borrowers share data more readily, which subsequently leads to an increase in the probability of loan approval and a reduction in interest rates. The effects hold across all credit risk profiles but are the most pronounced for borrowers with lower credit scores (a higher increase in loan approval rate) and higher credit scores (a larger reduction in interest rate). I also find that standard variables used in credit scoring explain substantially less variation in loan application outcomes when customers share data. Overall, these findings suggest that open banking improves financial inclusion, and also provide policy implications for regulators engaged in the adoption or extension of open banking policies. |
| Keywords: | Open banking,FinTech,Marketplace lending,P2P lending,Big data,Customer data sharing,Data access,Data portability,Digital footprints |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:safewp:364&r=pay |
| By: | Kanis Saengchote |
| Abstract: | Permissionless blockchains offer an information environment where users can interact privately without fear of censorship. Financial services can be programmatically coded via smart contracts to automate transactions without the need for human intervention or knowing user identity. This new paradigm is known as decentralized finance (DeFi). We investigate Compound (a leading DeFi lending protocol) to show how it works in this novel information environment, who its users are, and what factors determine their participation. On-chain transaction data shows that loan durations are short (31 days on average), and many users borrow to support leveraged investment strategies (yield farming). We show that systemic risk in DeFi arises from concentration and interconnection, and how traditional risk management practices can be challenging for DeFi. |
| Date: | 2022–12 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2212.05734&r=pay |
| By: | Christopher Henry; Matthew Shimoda; Julia Zhu |
| Abstract: | We present results from the 2021 Methods-of-Payment (MOP) Survey, including updated payment shares based on a three-day shopping diary. We highlight long-term trends observed across previous MOP surveys from 2009, 2013 and 2017. We also review patterns of the management and use of cash, the adoption and use of payment cards, and the use of alternative payment methods across different demographic groups. Using other survey and data sources, we provide additional context for these results with respect to the COVID-19 pandemic. |
| Keywords: | Bank notes; Digital currencies and fintech; Financial services; Coronavirus disease (COVID-19) |
| JEL: | D83 E41 |
| Date: | 2022–12 |
| URL: | http://d.repec.org/n?u=RePEc:bca:bocadp:22-23&r=pay |
| By: | Alfred Lehar; Christine A Parlour |
| Abstract: | We analyze a unique data set of collateral liquidations on two Decentralized Finance lending platforms – Compound and Aave. Such liquidations require arbitrageurs to repay the loan in return for the discounted collateral. Using Blockchain transaction data, we observe if arbitrageurs liquidate positions out of their own inventory or obtain "flash loans." To repay flash loans, arbitrageurs immediately sell the collateral asset. We document the high frequency price impact of such liquidity trades on nine different decentralized exchanges. Consistent with large block trades in equity markets there is a temporary and permanent price impact of collateral asset sales in DeFi. We document the effect of these trades on return distributions. Our work highlights the systemic fragility of decentralized markets. |
| Keywords: | Decentralized lending, blockchain, decentralized finance, system risk |
| JEL: | G1 G23 |
| Date: | 2022–12 |
| URL: | http://d.repec.org/n?u=RePEc:bis:biswps:1062&r=pay |
| By: | Miglo, Anton |
| Abstract: | Entrepreneurial, innovative and small- and medium-sized firms experience difficulties with raising funds using traditional debt and equity. Consequently, they are constantly looking for new strategies of financing. Latest inventions are crowdfunding and token issues. In contrast to traditional ways of raising funds these innovations: 1) use modern technology (on-line transactions, blockchain etc.) much more actively; 2) are usually quicker in reaching potential investors/funders; 3) use more actively network benefits such as, for example, a large number of interactions between investors/funders and between funders and firms. These changes are so significant that some experts list them among the top business inventions of 21st century. This article provides a review of the growing number of theoretical papers in the areas of crowdfunding and token issues, compare their findings with empirical evidence and discuss directions for future research. The research shows that a large gap exists between theoretical literature and empirical literature. |
| Keywords: | entrepreneurial finance, crowdfunding, token issues, initial coin offerings (ICO), initial exchange offerings (IEO), security token issues (STO) |
| JEL: | G32 L26 M13 M21 |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:115760&r=pay |
| By: | Yihang Fu; Zesen Zhuang; Luyao Zhang |
| Abstract: | Blockchain has empowered computer systems to be more secure using a distributed network. However, the current blockchain design suffers from fairness issues in transaction ordering. Miners are able to reorder transactions to generate profits, the so-called miner extractable value (MEV). Existing research recognizes MEV as a severe security issue and proposes potential solutions, including prominent Flashbots. However, previous studies have mostly analyzed blockchain data, which might not capture the impacts of MEV in a much broader AI society. Thus, in this research, we applied natural language processing (NLP) methods to comprehensively analyze topics in tweets on MEV. We collected more than 20000 tweets with \#MEV and \#Flashbots hashtags and analyzed their topics. Our results show that the tweets discussed profound topics of ethical concern, including security, equity, emotional sentiments, and the desire for solutions to MEV. We also identify the co-movements of MEV activities on blockchain and social media platforms. Our study contributes to the literature at the interface of blockchain security, MEV solutions, and AI ethics. |
| Date: | 2022–12 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2212.06951&r=pay |
| By: | Massimo Motta |
| Abstract: | Antitrust agencies all over the world have been investigating large digital platforms for practices which may constitute an abuse of dominance. Here I discuss practices (including ‘selfpreferencing’ and denial or degradation of interoperability) which can be interpreted as foreclosure in vertically-related or complementary markets. I discuss in particular a few high-profile cases involving Amazon, Apple, Facebook and Google. I focus on possible theories of harm for such cases and show that both original simple models and well-established economic theories (adapted or interpreted) provide a rationale for anti-competitive foreclosure. |
| Keywords: | self-preferencing, abuse of dominance, monopolization, exclusionary practices, digital platforms, two-sided markets, vertical foreclosure |
| JEL: | D40 K21 L10 L40 |
| Date: | 2022–12 |
| URL: | http://d.repec.org/n?u=RePEc:bge:wpaper:1374&r=pay |
| By: | Christopher McMahon; Donald McGillivray; Ajit Desai; Francisco Rivadeneyra; Jean-Paul Lam; Thomas Lo; Danica Marsden; Vladimir Skavysh |
| Abstract: | High-value payment systems (HVPSs) are typically liquidity-intensive because the payment requests are indivisible and settled on a gross basis. Finding the right order in which payments should be processed to maximize the liquidity efficiency of these systems is an NP-hard combinatorial optimization problem, which quantum algorithms may be able to tackle at meaningful scales. We develop an algorithm and run it on a hybrid quantum annealing solver to find an ordering of payments that reduces the amount of system liquidity necessary without substantially increasing payment delays. Despite the limitations in size and speed of today’s quantum computers, our algorithm provides quantifiable efficiency improvements when applied to the Canadian HVPS using a 30-day sample of transaction data. By reordering each batch of 70 payments as they enter the queue, we achieve an average of Can$240 million in daily liquidity savings, with a settlement delay of approximately 90 seconds. For a few days in the sample, the liquidity savings exceed Can$1 billion. This algorithm could be incorporated as a centralized preprocessor into existing HVPSs without entailing a fundamental change to their risk management models. |
| Keywords: | Digital currencies and fintech; Financial institutions; Financial services; Financial system regulation and policies; Payment clearing and settlement systems |
| JEL: | C61 C63 D83 E42 E58 |
| Date: | 2022–12 |
| URL: | http://d.repec.org/n?u=RePEc:bca:bocawp:22-53&r=pay |
| By: | Daniela Marconi (Bank of Italy); Marco Marinucci (Bank of Italy); Giovanna Paladino (Museo del Risparmio-Intesa Sanpaolo) |
| Abstract: | Is the propensity to save and to invest related to digital skills and financial knowledge? Do digital skills and financial knowledge affect people’s attitudes towards digital payments and digital financial services? Is there a gender gap? This paper addresses these issues by using a new dataset based on around 4, 000 individuals interviewed in two waves between 2019 and 2021. We find that digital and financial skills are fundamental to shaping financial behaviours and attitudes, including those towards digital financial services. But there are some reservations to be made: digital skills complement financial ones in managing personal budgets, monitoring expenses and saving money at the end of the month, as well as helping people realize the benefits of making use digital financial services. On the other hand, digital skills do not affect investment decisions. We also show that both digital and financial skills are positively associated with educational and income levels and are characterized by a significant gender gap. |
| Keywords: | Financial knowledge, digital skills, financial behavior, digital payments, digitalization, financial inclusion |
| JEL: | D53 G11 G53 O16 |
| Date: | 2022–12 |
| URL: | http://d.repec.org/n?u=RePEc:bdi:opques:qef_741_22&r=pay |
| By: | Ahmet Faruk Aysan (Hamad Bin Khalifa University); Asad Ul Islam Khan (Ibn Haldun University); Humeyra Topuz (Istanbul Sehir University); Ahmet Semih Tunali (Middle East Technical University) |
| Abstract: | This paper explores the applicability of universal cryptocurrency exchange by analyzing crypto exchanges of Binance, Latoken, Kucoin, and Qash, which also have their own cryptocurrencies in the crypto market. Results of the recursive Johansen cointegration test proved that even though all of the cryptocurrencies have cointegration among each other, Binance positively disassociated itself from others after it moved to Malta on 23 March 2018. Based on the daily prices of cryptocurrencies over the period from November 6, 2017, to November 10, 2019, taken from coinmarketcap, we conclude that Binance can be considered as a survival of the fittest among all of the crypto exchanges in this natural experiment. |
| Date: | 2022–02–20 |
| URL: | http://d.repec.org/n?u=RePEc:erg:wpaper:1539&r=pay |
| By: | Mois\'es Ram\'irez; Raziel Ru\'iz; Nathan Klarer |
| Abstract: | Fooji Inc. is a social media engagement platform that has created a proprietary "Just-in-time" delivery network to provide prizes to social media marketing campaign participants in real-time. In this paper, we prove the efficacy of the "Just-in-time" delivery network through a cluster analysis that extracts and presents the underlying drivers of campaign engagement. We utilize a machine learning methodology with a principal component analysis to organize Fooji campaigns across these principal components. The arrangement of data across the principal component space allows us to expose underlying trends using a $K$-means clustering technique. The most important of these trends is the demonstration of how the "Just-in-time" delivery network improves social media engagement. |
| Date: | 2022–12 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2212.12285&r=pay |
| By: | Koo, Kyong Hyun (KOREA INSTITUTE FOR INTERNATIONAL ECONOMIC POLICY (KIEP)); Kang, Gusang (KOREA INSTITUTE FOR INTERNATIONAL ECONOMIC POLICY (KIEP)); Moon, Ji Young (KOREA INSTITUTE FOR INTERNATIONAL ECONOMIC POLICY (KIEP)); Park, Hyeri (KOREA INSTITUTE FOR INTERNATIONAL ECONOMIC POLICY (KIEP)); Na, Seung Kwon (KOREA INSTITUTE FOR INTERNATIONAL ECONOMIC POLICY (KIEP)); Kim, Jegook (KOREA INSTITUTE FOR INTERNATIONAL ECONOMIC POLICY (KIEP)) |
| Abstract: | 디지털 플랫폼의 발전과 함께 글로벌 전자상거래 시장이 빠르게 성장하고 있다. 디지털 플랫폼을 활용한 국제화는 전통적인 방식에 비해 해외시장 진입 비용을 크게 낮추었는데, 이는 자본이나 인력 면에서 상대적으로 열세에 놓여 있는 중소기업에 새로운 기회를 제공할 것으로 기대된다. The global e-commerce market has been rapidly expanding due to the development of digital platforms. When compared to traditional methods, internationalization via digital platforms has significantly reduced the cost of entering overseas markets, which is expected to open up new opportunities for small- and medium-sized enterprises (SMEs) with limited capital or manpower. However, few studies have been conducted on domestic SMEs internationalization via digital platforms. Furthermore, little is known about the effects of relevant policies on SMEs’ use of digital platforms and internationalization. Aiming to fill this research gap, this study collects data on Korean SMEs’ online exports (i.e., exports via e-commerce), the most representative type of SMEs’ internationalization through digital platforms, establishes stylized facts, and investigates the effects of Korean SMEs’ online export support policies. Based on the findings, we also provide policy implications. In Chapter 2, we first conduct a survey on domestic SMEs’ online exports using a sample representing domestic SMEs registered as official e-commerce firms as of June 2021. Based on survey results, we document basic descriptive statistics on SMEs’ online exports behavior and investigate their main issues and policy demands. Chapter 3 outlines Korea’s online export support policies for SMEs and explores the effects of five major online export assistance programs on SMEs’ online exports. For the estimation of the effects, we combined the survey data from Chapter 2 with information on the firms participating in the programs, which are provided by the Ministry of SMEs and Startups and Korea Enterprise Data (KED). (the rest omitted) |
| Keywords: | 전자상거래; 무역정책; E -commerce; trade policy |
| Date: | 2021–12–30 |
| URL: | http://d.repec.org/n?u=RePEc:ris:kieppa:2021_016&r=pay |
| By: | Takeshi Yoshihara; Taisei Kaizoji |
| Abstract: | We applied the SVAR-LiNGAM to illustrate the causal relationships between the spot exchange rate, and three crypto-asset exchange rates, Bitcoin, Ethereum, and Ripple. It was notable that the causal order, the EUR_USD spot rate->Bitcoin->Ethereum->Ripple, was obtained by this approach. All the instantaneous effects were strongly positive. Moreover, it was notable that Bitcoin can influence the EUR_USD spot rate positively with a one-day time lag. |
| Date: | 2022–11 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2211.16176&r=pay |
| By: | K. V. Yupatova; O. A. Malafeyev; V. S. Lipatnikov; V. Y. Bezrukikh |
| Abstract: | The study discusses the main features which affect the IT companies valuation on the example of social networks. The relevance of the chosen topic is due to the fact that people live in the information age now, and information technologies surround us everywhere. Because of this, social networks have become very popular. They assist people to communicate with each other despite of the time and distance. Social networks are also companies that operate in order to generate income therefore their owners need to know how promising and profitable their business is. The social networks differ from traditional companies in this case the purpose of the research is determining the features of social networks that affect the accuracy and adequacy of the results of company valuation. The paper reviews the definitions of information technology, social networks, history, types of social networks, distinguishing features based on domestic and foreign literature. There are analyzed methods of assessing the value of Internet companies, their characteristics and methods of application. There is the six social networks evaluation was assessed in the practical part of the study: Facebook, Twitter, Pinterest, Snapchat, Sina Weibo and Vkontakte on the basis of the literature studied and the methods for evaluating the Internet companies which recommended in it, including the method of discounting the cash flow of the company as part of the income approach and the multiplier method as part of a comparative approach. Based on the analysis, the features that affect the social networks valuation are identified. |
| Date: | 2022–12 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2212.06674&r=pay |
| By: | Songrun He; Asaf Manela; Omri Ross; Victor von Wachter |
| Abstract: | Perpetual futures -- swap contracts that never expire -- are by far the most popular derivative traded in cryptocurrency markets, with more than $100 billion traded daily. Perpetuals provide investors with leveraged exposure to cryptocurrencies, which does not require rollover or direct cryptocurrency holding. To keep the gap between perpetual futures and spot prices small, long position holders periodically pay short position holders a funding rate proportional to this gap. The funding rate incentivizes trades that tend to narrow the futures-spot gap. But unlike fixed-maturity futures, perpetuals are not guaranteed to converge to the spot price of their underlying asset at any time, and familiar no-arbitrage prices for perpetuals are not available, as the contracts have no expiry date to enforce arbitrage. Here, using a weaker notion of random-maturity arbitrage, we derive no-arbitrage prices for perpetual futures in frictionless markets, and no-arbitrage bounds for markets with trading costs. These no-arbitrage prices provide a useful benchmark for perpetual futures and simultaneously prescribe a strategy to exploit divergence from these fundamental values. Empirically, we find that deviations of crypto perpetual futures from no-arbitrage prices are considerably larger than those documented in traditional currency markets. These deviations comove across cryptocurrencies, and diminish over time as crypto markets develop and become more efficient. A simple trading strategy generates large Sharpe ratios even for investors paying the highest trading costs on Binance, which is currently the largest crypto exchange by volume. |
| Date: | 2022–12 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2212.06888&r=pay |
| By: | Pletcher, Scott Nicholas |
| Abstract: | Video analytics is the practice of combining digital video data with machine learning models to infer various characteristics from that video. This capability has been used for years to detect objects, movement and the number of customers in physical retail stores but more complex machine learning models combined with more powerful computing power has unlocked new levels of possibility. Researchers claim it is now possible to infer a whole host of characteristics about an individual using video analytics–such as specific age, ethnicity, health status and emotional state. Moreover, an individual’s visual identity can be augmented with information from other data providers to build out a detailed profile–all with the individual unknowingly contributing their physical presence in front of a retail store camera. Some retailers have begun to experiment with this new technology as a way to better know their customers. However, those same early adopters are caught in an evolving legal landscape around privacy and data ownership. This research looks into the current legal landscape and legislation currently in progress around the use of video analytics, specifically in the retail in-store setting. Because the ethical and legal norms around individualized video analytics are still heavily in flux, retailers are urged to adopt a ‘wait-and-see’ approach or potentially incur costly legal expenses and risk damage to their brand. |
| Date: | 2022–12–06 |
| URL: | http://d.repec.org/n?u=RePEc:osf:osfxxx:tfw96&r=pay |
| By: | Paulus, Michael; Pfaff, Sara Anna |
| Keywords: | Research and Development/Tech Change/Emerging Technologies |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:ags:gewi22:329597&r=pay |
| By: | Langenbucher, Katja |
| Abstract: | Search costs for lenders when evaluating potential borrowers are driven by the quality of the underwriting model and by access to data. Both have undergone radical change over the last years, due to the advent of big data and machine learning. For some, this holds the promise of inclusion and better access to finance. Invisible prime applicants perform better under AI than under traditional metrics. Broader data and more refined models help to detect them without triggering prohibitive costs. However, not all applicants profit to the same extent. Historic training data shape algorithms, biases distort results, and data as well as model quality are not always assured. Against this background, an intense debate over algorithmic discrimination has developed. This paper takes a first step towards developing principles of fair lending in the age of AI. It submits that there are fundamental difficulties in fitting algorithmic discrimination into the traditional regime of antidiscrimination laws. Received doctrine with its focus on causation is in many cases ill-equipped to deal with algorithmic decision-making under both, disparate treatment, and disparate impact doctrine.0F 1 The paper concludes with a suggestion to reorient the discussion and with the attempt to outline contours of fair lending law in the age of AI. |
| Keywords: | credit scoring methodology,AI enabled credit scoring,AI borrower classification,responsible lending,credit scoring regulation,financial privacy,statistical discrimination |
| JEL: | C18 C32 K12 K23 K33 K40 J14 O31 O33 |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:safewp:369&r=pay |
| By: | Ghassan Dibeh (Department of Economics at the Lebanese American University) |
| Abstract: | This paper investigates the role of the new digital technologies in the Lebanese economy. After presenting an overview of the economy especially the postwar business cycle and the rise of a low productivity economy, the paper delineates the different aspects of the new technologies in Lebanon including the current state of startups, Fintech, e-government and e-commerce. Moreover, the paper investigates the potential labor market and inequality effects of the introduction of new technologies. The paper concludes with prospects and policy recommendations. |
| Date: | 2021–09–20 |
| URL: | http://d.repec.org/n?u=RePEc:erg:wpaper:1485&r=pay |
| By: | Artís, Annalí Casanueva (Paris School of Economics); Avetian, Vladimir (Université Paris-Dauphine); Sardoschau, Sulin (Humboldt University Berlin); Saxena, Kavya (affiliation not available) |
| Abstract: | How do modern social movements broaden their base? Prompted by the viral video footage of George Floyd's murder, the Black Lives Matter (BLM) movement gained unprecedented scope in the spring of 2020. In this paper, we show that pandemic exposure (COVID-19 related deaths) significantly increased the take-up of social media and subsequently mobilized protesters in whiter, more affluent and suburban counties with low ex-ante probability of protesting. We exploit Super Spreader Events in the early stages of the pandemic as a source of plausibly exogenous variation at the county level and develop a novel index of social media penetration, using information from more than 45 million tweets, google searches and mobility data. We show that a one standard deviation increase in pandemic exposure increased the number of new Twitter accounts by 27% and increased protest propensity by 9 percentage points. Our results suggest that social media can be persuasive and inspire action outside of traditional coalitions. |
| Keywords: | social media, BLM, protest, COVID-19 |
| JEL: | P16 D7 |
| Date: | 2022–12 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp15812&r=pay |
| By: | Norbert Lebrument (CleRMa - Clermont Recherche Management - ESC Clermont-Ferrand - École Supérieure de Commerce (ESC) - Clermont-Ferrand - UCA - Université Clermont Auvergne); Cédrine Zumbo-Lebrument (CleRMa - Clermont Recherche Management - ESC Clermont-Ferrand - École Supérieure de Commerce (ESC) - Clermont-Ferrand - UCA - Université Clermont Auvergne); Corinne Rochette (CleRMa - Clermont Recherche Management - ESC Clermont-Ferrand - École Supérieure de Commerce (ESC) - Clermont-Ferrand - UCA - Université Clermont Auvergne) |
| Abstract: | In recent years, the smart mobility inherent in smart city projects has been translated into the implementation of Mobility as a Service (MaaS) offerings embodied in platforms accessible from integrated service mobile applications. In this context, the aim of this article is to present the findings from an application of the Unified Theory of Acceptance and Use of Technology (UTAUT2) model to mobile MaaS applications (MMAs). Based on a sample of 693 respondents, the findings highlight the positive influence of performance expectancy, trust in technology and habit on the user's intention to use MMAs. They also show that habit and intention to use MMAs have a significant positive effect on users' actual usage behavior. Our findings demonstrate the predictive value of UTAUT2 for understanding and anticipating MMAs acceptance. Managerial recommendations based on our findings are formulated. |
| Abstract: | Depuis quelques années, la mobilité intelligente inhérente aux projets de ville intelligente s'est traduite par la mise en œuvre d'offres de Mobility as a Service (MaaS) s'incarnant dans des plateformes accessibles à partir d'applications mobiles de services intégrés. Dans ce contexte, le but de cet article est de proposer un modèle d'acceptation des applications mobiles de MaaS (AMM) en s'appuyant, pour ce faire, sur le modèle UTAUT2 (Unified Theory of Acceptance and Use of Technology). Reposant sur un échantillon de 693 répondants, les résultats soulignent l'influence positive de la performance attendue, de la confiance en la technologie et de l'habitude sur l'intention d'utiliser les AMM. Ils démontrent également que l'habitude et l'intention d'utiliser les AMM possèdent un effet positif significatif sur le comportement d'usage réel des individus. Nos résultats soulignent la valeur prédictive de l'UTAUT2 pour comprendre et anticiper l'acceptation des AMM. Des recommandations managériales basées sur ces résultats sont formulées. |
| Keywords: | ville intelligente,mobilité intelligente,mobility as a service,UTAUT2,services intégrés de mobilité |
| Date: | 2022–05–02 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-03665680&r=pay |
| By: | Úbeda, Fernando; Mendez, Alvaro; Forcadell, Francisco Javier |
| Abstract: | Lack of access to banking and financial services appreciably hinders development, particularly in the global South. For this reason, financial inclusion is a crucial objective of the Sustainable Development Goals. One main barrier to financial inclusion is the lack of trust in banking. From a sample of 40 developing countries and 82,724 individuals, we verify that multinational banks can increase trust in banking by incorporating sustainability criteria into their business model. |
| Keywords: | sustainable banking; finance inclusion; ESG criteria; trust in banking; multinational banks; SDGs |
| JEL: | F3 G3 N0 |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:117589&r=pay |
| By: | Napp, Clotilde (CNRS); Breda, Thomas (Paris School of Economics) |
| Abstract: | Most teenagers spend several hours per day on social media. We provide a large-scale investigation of the relationship between social media daily usage and body dissatisfaction among a sample of more than 50,000 15 y.o. students. This relation is positive and large for girls—higher use of social networks is associated with higher dissatisfaction about their body—and negative for boys. The positive relation for girls is observed in all eight countries included in the study, covering very different cultural contexts (e.g., Georgia, Ireland, Spain, Mexico, Panama or Hong Kong). It is observed for all girls, no matter their body mass index (BMI), their academic performance, and their socioeconomic background. Instrumenting social networks consumption by students' or students' peers' internet access at home while controlling finely for other students' or students' peers' household characteristics suggests that the relationship between social media consumption and girls' body dissatisfaction could be causal. |
| Keywords: | social media, body dissatisfaction |
| JEL: | I12 L82 |
| Date: | 2022–12 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp15811&r=pay |
| By: | Luigi Zingales |
| Abstract: | Digital markets are global in nature and prone to "tipping". The combination of these two factors makes the distortions of the inevitable monopolies in these markets very large, but it also undermines any effort at dealing with these distortions at a national level. I argue that the problem can only be solved by structural interventions that restore conditions for competition. Yet, no national regulator will have the ability to do so. Regulation can only arise in an international context. Paradoxically, the increasing international tension can create political opportunities for such international regulation. |
| Keywords: | Big tech, regulation, market power |
| JEL: | L5 L86 |
| Date: | 2022–12 |
| URL: | http://d.repec.org/n?u=RePEc:bis:biswps:1063&r=pay |
| By: | François Facchini (CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique) |
| Date: | 2021–12 |
| URL: | http://d.repec.org/n?u=RePEc:hal:cesptp:hal-03848914&r=pay |
| By: | Izak Atiyas (Sabanci University); Mark Dutz (The World Bank) |
| Abstract: | This paper focuses on uptake and use of mobile internet-enabled smartphones as a key access technology enabling benefits from digitalization. Geographically, the paper focuses on three regions of the African continent and the Middle East, namely sub-Saharan Africa (SSA), North Africa (NAfr) and non-rich Middle East (NRME) countries. The paper documents positive causal impacts of internet availability on the probability of employment, labor force participation, and falling poverty rates. The paper provides the following new findings. First, the main constraint to the benefits arising from broader digitalization lies not in internet coverage but in too little uptake and use of internet and the range of productive technologies that are enabled by internet. The paper finds that SSA, followed by NRME, South Asia and NAfr regions have the highest uptake gaps in the world, namely the highest percentage of their populations that have no internet use even though they are covered by at least a 3G network. Second, on the demand side, the most important conditional correlates of low uptake and use include low affordability as reflected in low incomes, high data prices and higher income inequality, low capabilities as reflected in low levels of education and skills, low levels of other complementary assets (especially electricity), and low attractiveness as reflected in low perceptions of useful content. The paper finds evidence of a significant positive correlation between lower uptake and lower incomes, lower capabilities, and lower access to electricity. Third, on the supply side, given levels of demand, the offered variety, quality, and price of internet and enabled digital services are critically associated with the level of market competition. The level of competition, in turn, depends on the policy and regulatory frameworks that govern the evolution of these markets. The paper finds evidence of a significant negative correlation between uptake and the degree of concentration in the mobile market as well as the key regulatory variable of Mobile Termination Rates (MTRs). Finally, when explored in a joint regression framework that combines selected demand and supply-side variables, quantitatively the most important variable associated with internet uptake is affordability (proxied by GDP per capita), followed by skills and electricity. Regulatory stance also matters: the statistical significance of market concentration and not MTRs suggests that regulatory actions and timing, including how they affect the nature and sequencing of entry may be more important than policies focusing on MTRs. |
| Date: | 2022–05–20 |
| URL: | http://d.repec.org/n?u=RePEc:erg:wpaper:1549&r=pay |
| By: | GALASSO Giovanna; MONTINO Carlo; GORI Matteo; RASMUSSEN Morten; ROMAN Laura; MCCOLGAN Owen; LIVA Giovanni; REBESCO Emanuele; BRYNSKOV Martin; MULQUIN Michael; MICHELI Marina (European Commission - JRC); SCHADE Sven (European Commission - JRC); SMITH Robin; KOTSEV Alexander (European Commission - JRC) |
| Abstract: | Data sharing plays a fundamental role in strengthening the European economy. The reuse of data have great potential at local level, as this allows informing and improvement of a range of services that citizens utilise in their lives. Accordingly, different European cities have been investing in data ecosystems as a structural solution for an effective sharing of data among stakeholders, namely public actors, private actors and/or citizens. However, these stakeholders have to deal with organisational and/or technical barriers hampering the development of such ecosystems, and, more extensively, the growth of the entire data economy. Therefore, the need to find effective and sustainable approaches for the use of data is becoming ever more urgent, and innovative practices can constitute a relevant solution. Local authorities, just like other stakeholders, may leverage on testing of technical or organisational mechanisms before adopting – and investing in them. This report aims to be a practical guide to adopt innovative solutions for data sharing at the local level by leveraging on the sandboxing approach. It is conceived as a practical orientation for a wide range of public administrators who are eager to develop, or improve, data ecosystems in their local contexts. By 'sandbox' we refer to an environment that allows to safely experiment with innovative solutions that allows for an agile and inclusive approach to foster hands-on experience for testing new applications or new organisational approaches. |
| Keywords: | data sharing, sandboxes, data spaces, digital innovation, data infrastructures |
| Date: | 2022–12 |
| URL: | http://d.repec.org/n?u=RePEc:ipt:iptwpa:jrc130555&r=pay |
| By: | Ozili, Peterson K |
| Abstract: | This article explores some of the difficult issues in financial regulation for financial stability. Noting the lack of prior academic work in the topic, this article presents a discussion of some difficult issues in financial regulation for financial stability. Some of the difficult issues include: the difficulty in breaking too-big-to-fail financial institutions into small insignificant parts; the difficulty in regulating executive compensation in the financial sector without limiting the ability of financial institutions to attract and reward executive talent; the difficulty in instilling strict financial regulation and supervision without limiting the ability of financial institutions to exploit emerging profitable opportunities; the difficulty in ensuring that financial institutions increase lending during a recession or in bad times; the rarity of having a female CEO and Chair in a major financial institution; the difficulty in making central banks independent from the influence of the federal government; the difficulty in making financial institutions become relevant in the ever-changing digital technology environment; and the difficulty in preventing financial institutions from taking excessive risks when strict regulations are loosened under a light-touch regulatory regime. The implication of the findings is that financial regulation for financial stability is not an easy task. There will be issues that financial regulation can address, and there will be issues that financial regulation cannot address. Acknowledging that such difficulties exist on the path to financial stability is the first step to addressing these issues. |
| Keywords: | financial regulation, financial stability, bank supervision, crisis, central bank, banks, financial institutions, financial innovations, banking and finance. |
| JEL: | G21 G28 |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:115783&r=pay |
| By: | Jakub Warmuz; Amit Chaudhary; Daniele Pinna |
| Abstract: | On November 22nd 2022, the lending platform AAVE v2 (on Ethereum) incurred bad debt resulting from a major liquidation event involving a single user who had borrowed close to \$40M of CRV tokens using USDC as collateral. This incident has prompted the Aave community to consider changes to its liquidation threshold, and limitations on the number of illiquid coins that can be borrowed on the platform. In this paper, we argue that the bad debt incurred by AAVE was not due to excess volatility in CRV/USDC price activity on that day, but rather a fundamental flaw in the liquidation logic which triggered a toxic liquidation spiral on the platform. We note that this flaw, which is shared by a number of major DeFi lending markets, can be easily overcome with simple changes to the incentives driving liquidations. We claim that halting all liquidations once a user's loan-to-value (LTV) ratio surpasses a certain threshold value can prevent future toxic liquidation spirals and offer substantial improvement in the bad debt that a lending market can expect to incur. Furthermore, we strongly argue that protocols should enact dynamic liquidation incentives and closing factor policies moving forward for optimal management of protocol risk. |
| Date: | 2022–12 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2212.07306&r=pay |
| By: | Bernard Hoekman (European University Institute) |
| Abstract: | Digitalization, along with the associated servification of economies, is both a driver and reflection of structural transformation. Digital technologies offer potential opportunities for Arab countries to diversify production and (intra-regional) trade, including complementing revealed comparative advantages in travel and transport services, enhancing participation in extant manufacturing value chains, and enhancing resilience to international shocks. Harnessing digitalization opportunities is conditional on an institutional and regulatory framework that supports access to and use of digital technologies and market platforms by micro, small, and medium-sized enterprises (MSMEs). The track record of exports of nontravel/transport services of many Arab countries is very heterogenous. The high service export growth rates for some countries demonstrate the potential that exists. However, the lack of dynamism in other Arab countries, despite proximity to large markets, suggests greater focus is needed on putting in place a supportive policy environment. Growth in digital trade is conditional on satisfying regulatory standards for data protection and the provision of services and digital products. Countries in other regions are actively pursuing digital trade cooperation, complementing trade agreements that encompass service trade and investment, and engaging in discussions on e-commerce, service regulation, and MSMEs. Many Arab countries have neglected services trade liberalization and are not engaged in international discussions to define good regulatory practices for the digital economy and identify measures to facilitate and support digital trade. This lack of attention may reduce the prospect of capturing digitalization opportunities. |
| Date: | 2021–09–20 |
| URL: | http://d.repec.org/n?u=RePEc:erg:wpaper:1484&r=pay |
| By: | Jaime de Melo (University of Geneva, FERDI and CEPR); Jean-Marc Solleder (University of Geneva) |
| Abstract: | The paper focuses on two challenges of digitalization for structural transformation in MENA and SSA, one particularly relevant for SSA countries, the other for MENA countries. For SSA on the way to account for half of the growth in the global labor force over the first half of the 21st century, the most pressing challenge is that automation presents a threat for employment. Digital technologies (digitech) could rob SSA from its demographic dividend enabled by rising wages in China. For MENA countries where manufacturing has largely failed to take off, the digital transformation where ‘value creation shifts from capital to knowledge’ presents an opportunity for structural transformation. Successful digitalization would then allow MENA countries to achieve a service-sector led high-productivity growth structural transformation. For countries in both regions, improving digital skills to close the growing digital gap will be necessary. Digitalization is only starting across developing countries and is barely visible in the data and estimates reported in this paper. The paper covers evidence on three aspects of digitalization. First, disparities in digitalization across countries in both regions may be increasing in a digital world increasingly data-driven. New technologies entering the exports of firms participating in GVCs present a threat for low-income countries through two channels. First, the new technologies are biased towards skills and other capabilities, reducing the comparative advantage of unskilled labor-abundant countries, like those in SSA. Second, this bias makes it harder for low-income countries to offset their technological disadvantage with their labor-cost advantage. Next, the paper documents the weak performance of services in SSA and MENA, a sector that has become the engine of structural transformation. SSA and MENA stand out for having registered the slowest average labor productivity growth in services across regions over 1995-2018. Great differences in the state of national data infrastructures are observed across both regions, a signal that many countries are not ready for cross-border e-commerce, an essential ingredient of the digital transformation. It reports on firm-level evidence establishing causality between exports of software-intensive services exports and the quality of data infrastructure. Third the paper shows that trade costs have remained higher and participation in supply chain trade lower than in most other regions. New econometric estimates suggest that an increase in telecom subscriptions is associated with a direct elasticity of GVC participation of 0.4 and an indirect effect of 0.25 through a reduction in trade costs. In sum, ‘this time may be different’ because the labor displacement effects of automation may not be accompanied by reinstatement effects observed during past episodes of widespread technological change when jobs were created to implement the new technologies. The complementarity between humans and machines observed in previous spells of technical progress may be threatened by the continued growth in automation and robots. MENA and SSA countries should also prepare for regulation of cross-border e-commerce by, among others, weighing the costs and benefits of data localization measures that can provide consumer protection and give an advantage to local firms. For African countries engaged in the AfCFTA, negotiations on protocol for e-commerce in phase III provides a unique opportunity for African countries to collectively establish common positions in e-commerce that would help guide their structural transformation. |
| Date: | 2022–05–20 |
| URL: | http://d.repec.org/n?u=RePEc:erg:wpaper:1547&r=pay |
| By: | Driskell, David |
| Abstract: | Technology plays an important role in identifying phenomena in society that are difficult to identify and analyse using more conventional methods. The economic and social technologies are particularly affected by this. As a result, technology has tended to represent reality in low-dimensional fashion without considering its realistic impact. A growing amount of detailed information is available about economic and social phenomena, making tools that exploit this informational abundance particularly useful. As a consequence, virtually every field of knowledge within the social sciences has been opened up to fascinating new perspectives. Many economists and social scientists believe that technological advancements are one of the primary drivers of economic growth in countries, regions, and cities. As a result of technological advancement, more and better goods and services can be produced more efficiently, which is what contributes to prosperity. In this article, the author has attempted to do a detailed study and review of leading books in the field of technology as well as its impact on the economy and society. Understanding the current and future impact of technology and innovation would be extremely beneficial. Technology has changed not only how we produce and connect, but also allows more humans to create and test new objects and ideas, reducing the costs and risks of innovation, and product development, also in developing countries. Collaboration between the public and private sectors is essential to the success of the digital age. To avoid monopolies and protect citizens, governments and regulators must ensure that regulation keeps pace with innovation. The author is optimistic that fears over future employment will subside as we adopt more and more new technologies and enjoy their benefits. We are poised to experience widespread change in the coming years, which makes the future seem more promising. |
| Keywords: | New Technologies and Economy, Society and Technology, Impact of Technology on Economy, Change and Technology, Future Employment and Technology |
| JEL: | O1 O3 O32 O33 Q55 |
| Date: | 2022–12–21 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:115764&r=pay |
| By: | Luyao Zhang; Xinyu Tian |
| Abstract: | Cooperation is fundamental for human prosperity. Blockchain, as a trust machine, is a cooperative institution in cyberspace that supports cooperation through distributed trust with consensus protocols. While studies in computer science focus on fault tolerance problems with consensus algorithms, economic research utilizes incentive designs to analyze agent behaviors. To achieve cooperation on blockchains, emerging interdisciplinary research introduces rationality and game-theoretical solution concepts to study the equilibrium outcomes of various consensus protocols. However, existing studies do not consider the possibility for agents to learn from historical observations. Therefore, we abstract a general consensus protocol as a dynamic game environment, apply a solution concept of bounded rationality to model agent behavior, and resolve the initial conditions for three different stable equilibria. In our game, agents imitatively learn the global history in an evolutionary process toward equilibria, for which we evaluate the outcomes from both computing and economic perspectives in terms of safety, liveness, validity, and social welfare. Our research contributes to the literature across disciplines, including distributed consensus in computer science, game theory in economics on blockchain consensus, evolutionary game theory at the intersection of biology and economics, bounded rationality at the interplay between psychology and economics, and cooperative AI with joint insights into computing and social science. Finally, we discuss that future protocol design can better achieve the most desired outcomes of our honest stable equilibria by increasing the reward-punishment ratio and lowering both the cost-punishment ratio and the pivotality rate. |
| Date: | 2022–12 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2212.05357&r=pay |
| By: | Laurent Bouton (GU - Georgetown University [Washington], CEPR - Center for Economic Policy Research - CEPR, NBER - National Bureau of Economic Research [New York] - NBER - The National Bureau of Economic Research); Julia Cagé (ECON - Département d'économie (Sciences Po) - Sciences Po - Sciences Po - CNRS - Centre National de la Recherche Scientifique); Edgard Dewitte (Sciences Po - Sciences Po); Vincent Pons (Harvard Business School - Harvard University [Cambridge], CEPR - Center for Economic Policy Research - CEPR, NBER - National Bureau of Economic Research [New York] - NBER - The National Bureau of Economic Research) |
| Abstract: | We study the characteristics and behavior of small campaign donors and compare them to large donors by building a dataset including all the 340 million individual contributions reported to the U.S. Federal Election Commission between 2005 and 2020. Thanks to the reporting requirements of online fundraising platforms first used by Democrats (ActBlue) and now Republicans (WinRed), we observe contribution-level information on the vast majority of small donations. We first show that the number of small donors (donors who do not give more than $200 to any committee during a two-year electoral cycle) and their total contributions have been growing rapidly. Second, small donors include more women and more ethnic minorities than large donors, but their geographical distribution does not differ much. Third, using a saturated fixed effects model, we find that race closeness, candidate ideological extremeness, whether candidates and donors live in the same district or state, and whether they have the same ethnicity increase contributions, with lower effects for small donors. Finally, we show that campaign TV ads affect the number and size of contributions to congressional candidates, particularly for small donors, indicating that pull factors are relevant to explain their behavior. |
| Keywords: | Campaign finance, Campaign contributions, Small donations, ActBlue, WinRed, TV advertising |
| Date: | 2021–12–06 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:hal-03878175&r=pay |
| By: | Musah, Alhassan; Yakubu, Ibrahim Nandom; Abagna, Matthew Amalitinga |
| Abstract: | This paper provides a review of the financial literacy literature mostly on definitional issues and some determinants. The paper also explores an emerging genre of research into financial literacy that emphasizes interconnectedness with society and financial systems, in general. The authors employ a literature review to examine the extant literature on the conceptual framework of financial literacy as well as empirical evidence on the causal relationship between financial literacy and efficient financial decision making. We argue that whilst the literature on financial literacy is growing it is far from being exhaustive, with substantial research outputs in other climes other than Africa. There is almost a tidy conclusion from the literature that young people and women are less likely to grasp basic financial concepts. The paper concludes by calling for a reconfiguration of research efforts in financial literacy to reflect context, and for policymakers to properly align the design of financial literacy programmes to meet the needs of key demographic segments in the short term, and to contribute to financial stability in the medium to long term. |
| Keywords: | Financial literacy, financial knowledge, socioeconomic factors |
| JEL: | G0 G2 G21 |
| Date: | 2022–10–31 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:115703&r=pay |
| By: | , Adedamola |
| Abstract: | The purpose of this paper was to contextualize the impact of the human factor owing to the increased involvement of third-party vendors by banks and other financial services providers and the rising threat level of supply chain attacks. On this, this paper presents a literature review of the risks posed by third party vendors within the present-day cyber environment including an evaluation of two core supply chain attacks, namely, Carbanak attack and the Equifax data breach. From these, it is established that with the increased prevalence and utilization of third-party vendors in banking and financial service provision, there is a need to integrate third-party risk management by addressing the key risks that emanate from the contracting organizations’ activities and relationships with the third-party vendors, and those posed by practices adopted by third-party vendors. To this, it has been established that while they are both independent organizations, there is a need to adopt an integrated framework that brings together strategy, processes, technology, and people dimensions associated with the human factor risk in the cyber environment. |
| Date: | 2022–12–14 |
| URL: | http://d.repec.org/n?u=RePEc:osf:osfxxx:qcbpg&r=pay |
| By: | Ahmed, Ashar SSCP (Government of Canada) |
| Abstract: | The emerging cybersecurity industry in Canada is not seen as anywhere near the scale of its American cyber-industrial complex counterpart, with limited-scale projects occurring to improve security sensor technology for institutions. However, due to international trade increasingly occurring through cyberspace, it is expected that the cyber industry will grow in Canada through both international and domestic partnerships, with Canadian critical infrastructure partners requiring greater security controls in order to ensure the confidentiality, integrity and availability of their data and operations. |
| Date: | 2022–11–11 |
| URL: | http://d.repec.org/n?u=RePEc:osf:osfxxx:9ft7q&r=pay |
| By: | Michel Grabisch (CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique); Antoine Mandel; Agnieszka Rusinowska |
| Abstract: | We propose a model of the joint evolution of opinions and social relationships in a setting where social influence decays over time. The dynamics are based on bounded confidence: social connections between individuals with distant opinions are severed while new connections are formed between individuals with similar opinions. Our model naturally gives raise to strong diversity, i.e., the persistence of heterogeneous opinions in connected societies, a phenomenon that most existing models fail to capture. The intensity of social interactions is the key parameter that governs the dynamics. First, it determines the asymptotic distribution of opinions. In particular, increasing the intensity of social interactions brings society closer to consensus. Second, it determines the risk of polarization, which is shown to increase with the intensity of social interactions. Our results allow to frame the problem of the design of public debates in a formal setting. We hence characterize the optimal strategy for a social planner who controls the intensity of the public debate and thus faces a trade-off between the pursuit of social consensus and the risk of polarization. We also consider applications to political campaigning and show that both minority and majority candidates can have incentives to lead society towards polarization. |
| Keywords: | opinion dynamics, network formation, network fragility, polarization, institution design, political campaign |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:hal:cesptp:halshs-03881461&r=pay |
| By: | Arthur Lewbel (Boston College); Xi Qu (Shanghai Jiao Tong University); Xun Tang (Rice University) |
| Abstract: | We propose an adjusted 2SLS estimator for social network models when some existing network links are missing from the sample (due, e.g., to recall errors by survey respondents, or lapses in data input). In the feasible structural form, missing links make all covariates endogenous and add a new source of correlation between the structural errors and endogenous peer outcomes (in addition to simultaneity), thus invalidating conventional estimators used in the literature. We resolve these issues by rescaling peer outcomes with estimates of missing rates and constructing instruments that exploit properties of the noisy network measures. We apply our method to study peer effects in household decisions to participate in a microfinance program in Indian villages. We find that ignoring missing links and applying conventional instruments would result in a sizeable upward bias in peer effect estimates. |
| Keywords: | social networks, 2SLS, missing links |
| Date: | 2022–12–20 |
| URL: | http://d.repec.org/n?u=RePEc:boc:bocoec:1056&r=pay |