nep-pay New Economics Papers
on Payment Systems and Financial Technology
Issue of 2023‒03‒27
29 papers chosen by

  1. Cryptocurrencies: Review of Economics and Policy By Sonan Memon
  2. What Will Be the Impact of Fintech on the Payment System? A Perspective from Money Creation By Hajime Tomura
  3. Content Moderation and Advertising in Social Media Platforms By Leonardo Madio
  4. A Tale of Two Currencies: Cash and Crypto By Ravi Kashyap
  5. Monetary Policy, Digital Assets, and DeFi Activity By Antzelos Kyriazis; Iason Ofeidis; Georgios Palaiokrassas; Leandros Tassiulas
  6. The optimal quantity of CBDC in a bank-based economy By Lorenzo Burlon; Carlos Montes-Galdón; Manuel A. Muñoz; Frank Smets
  7. Information technology, inequality and adult literacy in developing countries By Simplice A. Asongu; Nicholas M. Odhiambo; Mushfiqur Rahman
  8. Adverse weather amplifies social media activity By Kelton Minor; Esteban Moro; Nick Obradovich
  9. How the Internet Changed the Market for Print Media By Manudeep Bhuller; Tarjei Havnes; Jeremy McCauley; Magne Mogstad
  10. Digital for Green: Leveraging Digital Technologies to Improve Sustainability By Nicolas van Zeebroeck; Julien Gosse; James JF Fitzhenry
  11. Inclusion and Democratization Through Web3 and DeFi? Initial Evidence from the Ethereum Ecosystem By Lin William Cong; Ke Tang; Yanxin Wang; Xi Zhao
  12. On the Validity of Using Webpage Texts to Identify the Target Population of a Survey: An Application to Detect Online Platforms By Daas, Piet; Hassink, Wolter; Klijs, Bart
  13. Bridging Gaps, Breaking Barriers, and Building Capacities in Online Marketplaces By Bayudan-Dacuycuy, Connie; Sinsay, Leih Maruss V.
  14. Black Ownership Matters: Does Revealing Race Increase Demand For Minority-Owned Businesses? By Abhay Aneja; Michael Luca; Oren Reshef
  15. The Evolution of Financial Market Infrastructure: From Digitalization to Tokenization By Guo, Dong; Zhou, Peng
  16. Curation Strategy of Platforms in the Sharing Economy: A Simple Micro Economic Approach By Noriyuki Doi
  17. Bank competition development against the backdrop of digitization By Vedev Alexey
  18. Does the Closeness of Peers Matter? An Investigation Using Online Training Platform Data and Survey Data By Gu, Xin; Li, Haizheng
  19. The Economics of Digital Privacy By Avi Goldfarb; Verina F. Que
  20. What Will Be the Impact of Fintech on the Payment System? A Perspective from Money Creation By Hajime Tomura
  21. Online social integration of migrants: evidence from Twitter By Ji Su Kim; Soazic Elise Wang Sonne; Kiran Garimella; André Grow; Ingmar G. Weber; Emilio Zagheni
  22. Electronic Foreclosures By Francesco Mazzola
  23. Geographical Proximity and Enhanced Attention in P2B Crowdlending Strategies By Carole Gresse; Hugo Marin
  24. Similarities and Differences in the Adoption of General Purpose Technologies By Ajay K. Agrawal; Joshua S. Gans; Avi Goldfarb
  25. Does Twitter data mirror the European North-South family ties divide? A comparative analysis of tweets about family. By Gil-Clavel, Sofia; Mulder, Clara H.
  26. Green Digital Nudging and channel relationships By Aiolfi, Simone
  27. Exploring the Advantages of Transformers for High-Frequency Trading By Fazl Barez; Paul Bilokon; Arthur Gervais; Nikita Lisitsyn
  28. Artificial intelligence adoption in the public sector- a case study By Laura Nurski
  29. Does Money Growth Predict Inflation? Evidence from Vector Autoregressions Using Four Centuries of Data By Edvinsson, Rodney; Karlsson, Sune; Österholm, Pär

  1. By: Sonan Memon (Pakistan Institute of Development Economics)
    Abstract: In this review paper, I begin by discussing crypto’s market penetration, legal status, and economic opportunities for Pakistan. I mainly focus on the economics of digital “currencies”. Key questions include how does crypto “currency” compare with traditional fiat currencies as a substitute? Which economic problems does it currently solve or have the potential to solve (e.g. lowers verification and networking costs)? What are its economic limitations (e.g. high energy costs, speculative bubbles, prohibitive costs of maintaining incentive compatibility and the blockchain trilemma)? How does the widespread adoption of digital currencies change the monetary and fiscal policy paradigm? Which set of regulations are needed from policymakers to address crypto’s adverse effects, such as accommodating illicit activities and threatening consumer protection? In the appendix, I also summarise the design features of the technology that underlies cryptocurrencies.
    Keywords: Cryptocurrencies: Bitcoin, Ethereum, Tether etc, Blockchain Technology, Economics of Cryptocurrencies, Implications for Fiscal and Monetary Policy, Regulation of Crypto Market,
    JEL: E00 E31 E40 E41 E42 E43 E44 E50 E58 E62 F33
    Date: 2022
  2. By: Hajime Tomura (Waseda University)
    Abstract: The efficiency of thecurrentpayment systemrestsnot only onengineering technology but also on the legal tender and central bank system enacted by each country’s law.This essay compares the current paymentsystem with an alternative payment system that uses electronic records, such as cryptocurrencies and security tokens, assubstitutesfor conventionalcurrencies. The alternative payment system has an advantage in designing the integration of electronic payments into non-bank businesses from scratch without being bound by the technical specifications of existing bank deposit account systems. On the other hand, it cannot benefit from the supply of legal tender issued bythe central bank. Given this disadvantage, this essay argues that electronic records such as cryptocurrencies and security tokens will not substitute conventional currencies aspontaneously. Rather than changing the internal structure of the banking system, fintech will facilitate connections between bank deposit account systems and non-banking systems. Given this outlook, this essay predicts that central-bank digital currency (CBDC) will be a kind of enabler service if implemented in acountry with a developed banking system.
    Keywords: paymentsystems, security tokens, cryptocurrencies, electronic money, legal tender, central-bank digital currency.
    Date: 2022–10
  3. By: Leonardo Madio (University of Padova Author-Name: Martin Quinn; Rotterdam School of Management)
    Abstract: On social media platforms, advertisers can be exposed to brand safety issues if they are associated with unsafe content. In this paper, we study the incentive of an ad-funded platform to curb the presence of unsafe content. Moderating unsafe content reduces the risk of advertiser presence on social media platforms, but it can change users’ participation on the platform and, in turn, affect advertisers’ monetization. This indirect “eyeball effect†can be either positive or negative and is key for the platform’s design of its content moderation policy. We identify conditions for the platform not to moderate unsafe content and demonstrate how the optimal moderation policy depends on the risk the advertisers face. We also study the intended and unintended effects of a policy that mandates social media platforms to moderate (more) unsafe content. We show that although it can benefit advertisers, users may be worse off because of the greater number of ads they are exposed to. Finally, we study how social media platform competition and the introduction of taxes on social media activity can distort the platform’s moderation strategies.
    Keywords: Advertising; Content moderation; Social media platforms; Platforms.
    Date: 2023–03
  4. By: Ravi Kashyap
    Abstract: We discuss numerous justifications for why crypto-currencies would be highly conducive for the smooth functioning of today's society. We provide several comparisons between cryptocurrencies issued by blockchain projects, crypto, and conventional government issued currencies, cash or fiat. We summarize seven fundamental innovations that would be required for participants to have greater confidence in decentralized finance (DeFi) and to obtain wealth appreciation coupled with better risk management. The conceptual ideas we discuss outline an approach to: 1) Strengthened Security Blueprint; 2) Rebalancing and Trade Execution Suited for Blockchain Nuances 3) Volatility and Variance Adjusted Weight Calculation 4) Accommodating Investor Preferences and Risk Parity Construction; 5) Profit Sharing and Investor Protection; 6) Concentration Risk Indicator and Performance Metrics; 7) Multi-chain expansion and Select Strategic Initiatives including the notion of a Decentralized Autonomous Organization (DAO). Incorporating these concepts into several projects would also facilitate the growth of the overall blockchain eco-system so that this technology can, have wider mainstream adoption and, fulfill its potential in transforming all aspects of human interactions.
    Date: 2023–02
  5. By: Antzelos Kyriazis; Iason Ofeidis; Georgios Palaiokrassas; Leandros Tassiulas
    Abstract: This paper studies the effects of unexpected changes in US monetary policy on digital asset returns. We use event study regressions and find that monetary policy surprises negatively affect BTC and ETH, the two largest digital assets, but do not significantly affect the rest of the market. Second, we use high-frequency price data to examine the effect of the FOMC statements release and Minutes release on the prices of the assets with the higher collateral usage on the Ethereum Blockchain Decentralized Finance (DeFi) ecosystem. The FOMC statement release strongly affects the volatility of digital asset returns, while the effect of the Minutes release is weaker. The volatility effect strengthened after December 2021, when the Federal Reserve changed its policy to fight inflation. We also show that some borrowing interest rates in the Ethereum DeFi ecosystem are affected positively by unexpected changes in monetary policy. In contrast, the debt outstanding and the total value locked are negatively affected. Finally, we utilize a local Ethereum Blockchain node to record the activity history of primary DeFi functions, such as depositing, borrowing, and liquidating, and study how these are influenced by the FOMC announcements over time.
    Date: 2023–02
  6. By: Lorenzo Burlon; Carlos Montes-Galdón; Manuel A. Muñoz; Frank Smets (-)
    Abstract: We provide evidence on the estimated effects of news about the introduction of a digital euro on bank valuations and lending and find that the effects depend on the reliance on deposit funding and design features aimed at calibrating the quantity of the central bank digital currency (CBDC). Then, we develop a quantitative DSGE model that replicates such evidence and incorporates key selected mechanisms through which CBDC issuance could affect bank intermediation and the economy. Under empirically-relevant assumptions (i.e. imperfect substitutability across CBDC, cash and deposits and a number of financial constraints such as a collateral requirement for central bank funding), the issuance of CBDC yields non-trivial welfare trade-offs between, on one side, the positive expansion of liquidity services and the improved stabilization of deposit funding and lending and, on the other side, a negative bank disintermediation effect. Welfare-maximizing CBDC policy rules are effective in mitigating the risk of bank disintermediation and induce significant welfare gains. The optimal amount of CBDC in circulation for the case of the euro area lies between 15% and 45% of quarterly GDP in equilibrium.
    JEL: E42 E58 G21
    Date: 2023–02
  7. By: Simplice A. Asongu (Yaounde, Cameroon); Nicholas M. Odhiambo (Pretoria, South Africa); Mushfiqur Rahman (University of Wales, UK)
    Abstract: The study assesses linkages between information technology, inequality and adult literacy in 57 developing countries for the period 2012-2016. Income inequality is measured with the Gini coefficient while six dynamics of information technology are taken on board, namely: use of virtual social network, internet access in schools, internet penetration, mobile phone penetration, fixed broadband subscription and number of personal computer users. The findings show that only internet access in schools unconditionally promote adult literacy. The corresponding inequality threshold that should not be exceeded in order for internet access in schools to continue promoting adult literacy is 0.739 of the Gini coefficient. Policy implications are discussed.
    Keywords: information technology, inequality; adult literacy
    JEL: D10 D14 D31 D60 O30
    Date: 2023–01
  8. By: Kelton Minor; Esteban Moro; Nick Obradovich
    Abstract: Humanity spends an increasing proportion of its time interacting online. Scholars are intensively investigating the societal drivers and resultant impacts of this collective shift in our allocation of time and attention. Yet, the external factors that regularly shape online behavior remain markedly understudied. Do environmental factors alter rates of online activity? Here we show that adverse meteorological conditions markedly increase social media use in the United States. To do so, we employ climate econometric methods alongside over three and a half billion social media posts from tens of millions of individuals from both Facebook and Twitter between 2009 and 2016. We find that more extreme temperatures and added precipitation each independently amplify social media activity. Weather that is adverse on both the temperature and precipitation dimensions produces markedly larger increases in social media activity. On average across both platforms, compared to the temperate weather baseline, days colder than -5{\deg}C with 1.5-2cm of precipitation elevate social media activity by 35%. This effect is nearly three times the typical increase in social media activity observed on New Year's Eve in New York City. We observe meteorological effects on social media participation at both the aggregate and individual level, even accounting for individual-specific, temporal, and location-specific potential confounds.
    Date: 2023–02
  9. By: Manudeep Bhuller; Tarjei Havnes; Jeremy McCauley; Magne Mogstad
    Abstract: Combining comprehensive data from the Norwegian media market on newspaper circulation, readership, revenues, factor inputs, and product characteristics with plausibly exogenous variation in the availability and adoption of broadband internet, this paper provides causal evidence on how the internet affected the traditional print media market. Household adoption of broadband internet triggered large reductions in print readership and circulation and equally large increases in online news readership. Despite strong substitution from print to online news consumption, newspaper firms’ revenues fell by almost 30%. Newspaper firms responded by dramatically cutting costs, either by shedding labor inputs or by reducing the physical size of newspaper sheets, and in doing so avoided meaningful losses in profits. The printed newspaper product available to customers also changed, as newspapers shifted content away from tabloid to more serious news. This paper offers a case study on how an adverse technology shock transmits through firms with multiple margins of adjustment, and provides an explanation for the economic resilience of newspapers.
    JEL: L11 L82 L86 O33 R22
    Date: 2023–02
  10. By: Nicolas van Zeebroeck; Julien Gosse; James JF Fitzhenry
    Date: 2023–02–07
  11. By: Lin William Cong; Ke Tang; Yanxin Wang; Xi Zhao
    Abstract: Web3 and DeFi are widely advocated as innovations for greater financial inclusion and democratization. We assemble the most comprehensive dataset to date on the largest Web3 ecosystem and use large-scale computing to conduct an initial investigation. We describe Ethereum’s network structure, time trends, and distributions of transactions, mining, and ownership. Mining income and Ether ownership are concentrated in exchanges and a few individual nodes. Network activities evolve from peer-to-peer to user-DApps/DeFi interactions, with significantly more transactions by large players. Moreover, high percentage transaction fees, congestion-induced fluctuation of gas prices, suboptimal reserve setting, and large return volatility of tokens present particular challenges for small, poor, unsophisticated, and new nodes, not to mention that the high failure rates hurt all users. Finally, we present suggestive causal evidence that base-fee burning mechanisms (e.g., EIP-1559) and airdrop programs (e.g., OmiseGo Airdrop) facilitate inclusion through token monetary redistribution.
    JEL: D63 E50 G29 H23 L14
    Date: 2023–02
  12. By: Daas, Piet (Eindhoven University of Technology); Hassink, Wolter (Utrecht University); Klijs, Bart (Statistics Netherlands)
    Abstract: A statistical classification model was developed to identify online platform organizations based on the texts on their website. The model was subsequently used to identify all (potential) platform organizations with a website included in the Dutch Business Register. The empirical outcomes of the statistical model were plausible in terms of the words and the bimodal distribution of fitted probabilities, but the results indicated an overestimation of the number of platform organizations. Next, the external validity of the outcomes was investigated through a survey held under the organizations that were identified as a platform organization by the statistical classification model. The response by the organizations to the survey confirmed a substantial number of type-I errors. Furthermore, it revealed a positive association between the fitted probability of the text-based classification model and the organization's response to the survey question on being an online platform organization. The survey results indicated that the text-based classification model can be used to obtain a subpopulation of potential platform organizations from the entire population of businesses with a website.
    Keywords: online platform organizations, external validation, type-I error, machine learning, web pages
    JEL: C81 C83 D20 D83 L20
    Date: 2023–02
  13. By: Bayudan-Dacuycuy, Connie; Sinsay, Leih Maruss V.
    Abstract: As the Fourth Industrial Revolution transforms the conduct of work and enterprises, inequalities and the digital-spatial divide become front and center of conversations that aim to promote online marketplaces and maximize their benefits. This paper takes stock of the development in human capital, labor market, and e-commerce, identifies state-led initiatives to build capacities, and analyzes barriers and gaps in labor and retail platforms. Data collected through desk reviews and key informant interviews with stakeholders were synthesized to highlight state-led initiatives and programs related to platform work, identify barriers to participation in the digital economy, and draw recommendations to address gaps. The paper finds that several state-led programs and initiatives for online marketplaces and legislative agenda related to the digital economy are in place. Despite this, the paper finds that (1) barriers related to gender roles, business environments, and financing exist and (2) gaps in social protection, digital competencies, and infrastructure support remain. Some directions to bridge gaps, break barriers to participation, and build capacities are forwarded to harness the full potential of labor and retail platforms. Comments to this paper are welcome within 60 days from the date of posting. Email
    Keywords: Online marketplaces;platform work;freelancing;human capital;labor;retail platforms
    Date: 2022
  14. By: Abhay Aneja; Michael Luca; Oren Reshef
    Abstract: Is there consumer demand to support Black-owned businesses? To explore, we investigate the impact of a new feature on a large online platform that made the race of a set of Black business owners salient to customers. We find that this feature substantially increased demand for Black-owned businesses - in the form of more calls to the restaurant, more delivery orders, and - using cell phone data from a different platform - more in person visits to the restaurant. New customers to Black-owned businesses were more likely to be White customers - suggesting demand among White restaurant goers for Black-owned businesses. The gains for Black-owned businesses vary across geographically fine-grained measures of racial prejudice: we observe larger gains in areas with less anti-Black bias, as measured by implicit association tests. We also find suggestive evidence that the effects are stronger in predominately White, Democratic-leaning areas.
    JEL: J0
    Date: 2023–02
  15. By: Guo, Dong; Zhou, Peng (Cardiff Business School)
    Abstract: This paper examines the historical development and cross­sectional heterogeneities of Financial Market Infrastructure (FMI). From an evolutionary perspective, we review and compare FMIs in the US, Europe, and China. We identify an emerging trend in which the development of FMI is transitioning from digitalization to tokenization with the rise of Distributed Ledger Technology (DLT). Digitalization reinforces centralization, while tokenization promotes decentralization, posing complex challenges to regulatory framework which is also part of FMI. We then specifically analyze DLT­based FMI in the bond market, evaluate different models of tokenization, and propose a heterogeneous consortium blockchain solution.
    Keywords: digitalization; tokenization; blockchain; bond
    Date: 2023–03
  16. By: Noriyuki Doi (Emeritus Professor and Visiting Researcher at Innovation System Research Center, Kwansei Gakuin University)
    Abstract: Platform curation plays a key role in the sharing economy, and suggests challenging perspectives and opportunities in policy-making. This paper focuses on the curation by sharing platforms, and explains its incentives and social welfare effects, using a simple micro-economic theory, and taking into consideration some features observed in the sharing economy. And future policy and research agenda are summarized.
    Keywords: sharing economy, platform, curation, social welfare regulation
    JEL: L41 L42 L43
    Date: 2023–03
  17. By: Vedev Alexey (Gaidar Institute for Economic Policy)
    Abstract: Current global economy development trends make banks to speed up their transfer from traditional business models to financial ecosystems based on modern digital instruments. This suggests modernization of the overall banking supervision system, introduction of new regulatory principles and control methods and adjustment of traditional approaches to a new environment. The study looks into the digital transformation’s negative effects on the level of competition in the banking sector and provides an in-depth analysis of international experience in implementing financial and technological innovations in commercial banks, as well as approaches to evaluating the level of banking competition. The study is aimed at developing the guidelines for upgrading banking oversight and regulation to facilitate organizational and stabilizing effect and bolster confidence in banks as financial intermediaries, as well as proposals on introduction of new mechanisms of neutralizing bank risks amid technological transformation of the Russian financial sector.
    Keywords: Russian economy, banking sector, banking competition, bank risks, Russian financial sector
    JEL: G21 G24 G28
    Date: 2022
  18. By: Gu, Xin (Georgia Institute of Technology); Li, Haizheng (Georgia Tech)
    Abstract: We study peer effects in online training participation using unique data from a large-scale online teacher training program. The platform data allow us to observe the accurate duration of attendance for every individual-lecture pair. We classify peer groups as close peers, local peers, and global peers based on their relationships. By controlling for unobserved heterogeneity, we find positive effects of close and local peer appearance on trainees' joining a lecture and on their length of stay in the lecture. However, global peers generate a negative but economically insignificant impact. Peer effects differ by group and increase with the relationship closeness. Using the survey data, we investigate the mechanisms of peer influences and find that social interactions facilitate online peer effects. Peer pressure and reputation concerns also help explain our findings. Our results shed new light on how peer effects can be utilized to improve the effectiveness of online learning.
    Keywords: peer effects, online training
    JEL: I21 J24 M53
    Date: 2023–02
  19. By: Avi Goldfarb; Verina F. Que
    Abstract: There has been increasing attention to privacy in the media and in regulatory discussions. This is a consequence of the increased usefulness of digital data. The literature has emphasized the benefits and costs of digital data flows to consumers and firms. The benefits arise in the form of data-driven innovation, higher quality products and services that match consumer needs, and increased profits. The costs relate to intrinsic and instrumental values of privacy. Under standard economic assumptions, this framing of a cost-benefit tradeoff might suggest little role for regulation beyond ensuring consumers are appropriately informed in a robust competitive environment. The empirical literature thus far has focused on this direct cost-benefit assessment, examining how privacy regulations have affected various market outcomes. However, an increasing body of theory work emphasizes externalities related to data flows. These externalities, both positive and negative, suggest benefits to the targeted regulation of digital privacy.
    JEL: L51 L86
    Date: 2023–02
  20. By: Hajime Tomura (Waseda University)
    Abstract: This study investigates whether revealing others' actions canreduce polarization in the decontextualized settings of laboratory experiments. Despite wealth of studies on polarization, it has not been examined rigorously with varying treatments in laboratory settings. Theoretically, if people can infer others' private information through their actions, polarization should reduce for a policy that has common interests. To this end, we have conducted a novel laboratory experiment with a set of treatments theoretically derived. Our experiments show the following implications. First, when others' actions were revealed only once, polarization reduced in the short run, but increased in the long run. Second, when others' actions were revealed in all rounds, polarization reduced and almost disappeared. However, if participants thought that others had insufficient information, polarization persisted—even when others' actions were revealed in all rounds. In addition, a reduction in polarization is not necessary to increase participants' welfare since they may converge in the wrong direction. We apply our findings to real-world political issues including COVID-19 vaccination and cross-cutting views on social media and extend our discussions.
    Keywords: belief polarization, laboratory experiments, asymmetric information
    JEL: C92 D72 D82 D83
    Date: 2022–10
  21. By: Ji Su Kim (Max Planck Institute for Demographic Research, Rostock, Germany); Soazic Elise Wang Sonne (Max Planck Institute for Demographic Research, Rostock, Germany); Kiran Garimella; André Grow (Max Planck Institute for Demographic Research, Rostock, Germany); Ingmar G. Weber; Emilio Zagheni (Max Planck Institute for Demographic Research, Rostock, Germany)
    Abstract: As online social activities have become increasingly important for people’s lives and well-being, understanding how migrants integrate into online spaces is crucial for providing a more complete picture of integration processes. We curate a high-quality data set to quantify patterns of new online social connections among immigrants in the United States. Specifically, we focus on Twitter, and leverage the unique features of these data, in combination with a propensity score matching technique, to isolate the effects of migration events on social network formation. The results indicate that migration events led to an expansion of migrants' networks of friends on Twitter in the destination country, relative to those of users who had similar characteristics, but who did not move. We found that male migrants between 19 and 29 years old who actively posted more tweets in English after migration also tended to have more local friends after migration compared to other demographic group, which indicates that migrants' demographic characteristics and language skills can affect their level of integration. We also observed that the percentage of migrants' friends who were from their country of origin decreased in the first few years after migration, and increased again in later years. Finally, unlike for migrants' friends networks, which were under their control, we did not find any evidence that migration events expanded migrants' networks of followers in the destination country. While following users on Twitter in theory is not a geographically constrained process, our work shows that offline (re)location plays a significant role in the formation of online networks.
    Keywords: America, World, immigrants, immigration, integration, social network
    JEL: J1 Z0
    Date: 2023
  22. By: Francesco Mazzola
    Abstract: This paper investigates how auction bidding formats affect U.S. mortgage foreclosure sales. Exploiting a staggered adoption of electronic bidding acrossadjoined counties in a “stacked” difference-in-differences design, I show that foreclosure auction success increases by 27%, and price discounts contract by42%. The effects are stronger in areas with more remote courthouses, and for properties in better conditions. Buyer composition of electronic foreclosureauctions shifts towards local non-professionals, who are less likely to buy-to-let and flip acquired properties ex-post. This evidence suggests that technologicalmodernizations in real estate markets can lead to better matching, deepen liquidity and foster financial inclusion.
    Keywords: Credit Market; Electronic Marketplace; Mortgage Foreclosures; Online Auction
    JEL: R3
    Date: 2022–01–01
  23. By: Carole Gresse (DRM - Dauphine Recherches en Management - Université Paris Dauphine-PSL - PSL - Université Paris sciences et lettres - CNRS - Centre National de la Recherche Scientifique); Hugo Marin (DRM - Dauphine Recherches en Management - Université Paris Dauphine-PSL - PSL - Université Paris sciences et lettres - CNRS - Centre National de la Recherche Scientifique)
    Abstract: Using data from a peer-to-business crowdlending platform that exploits an auction-driven system to fund corporate loans, we show that non-professional investors are subject to a geographical-proximity bias. They are more likely to win the auctions of borrowers located close to their place of residence notwithstanding that they are not better informed about their creditworthiness. Unexpectedly, this behavioral bias distorts the loan rate discovery processby increasing the cost of funding for borrowers. This adverse effect results from the greaterability of local investors to submit winning bids at an early stage. This ability is gained from their experience in previous auctions of geographically close borrowers. This suggests that the familiarity feeling stemming from geographical closeness strengthens investor attention, and thereby improves lenders' knowledge about the dynamics of the order flow in local borrowers' auctions.
    Keywords: peer-to-business crowdlending, crowdfunding, behavioral finance, loan performance, price discovery process
    Date: 2022–07–11
  24. By: Ajay K. Agrawal; Joshua S. Gans; Avi Goldfarb
    Abstract: Economic models provide little insight into when the next big idea and its associated productivity dividend will come along. Once a general purpose technology (GPT) is identified, the economist’s toolkit does provide an understanding when firms will adopt a new technology and for what purpose. The focus of the literature has been on commonalities across each type of GPT. This focus is natural, given that the goal of the literature has been to identify generalizable insights across technologies. Broadly, this literature emphasizes heterogeneity in co-invention costs across firms. Each GPT, however, provides a distinct benefit. Steam provided a new power source. The internet facilitated communication. The differences between GPTs are important for understanding adoption patterns. Using the examples of the internet and artificial intelligence, we discuss how both co-invention costs and distinct benefits determine the adoption of technology. For both technologies, we demonstrate that discussions of the impact of a GPT on productivity and growth need to emphasize the benefits as well as the costs. The goal of this paper is therefore to link the literature on co-invention costs with an understanding of the distinct benefits of each GPT.
    JEL: O33 O4
    Date: 2023–02
  25. By: Gil-Clavel, Sofia (Max Planck Institute for Demographic Research); Mulder, Clara H.
    Abstract: Previous research on the relationship between geographical distance and the frequency of contact between family members has shown that the strength of family ties differs between Northern and Southern Europe. However, little is known about how family ties are reflected in peoples’ conversations on social media, despite research showing the relevance of social media data for understanding users’ daily expressions of emotions and thoughts based on their immediate experiences. This work investigates the question of whether Twitter use patterns in Europe mirror the North-South divide in the strength of family ties by analyzing potential differences in family-related tweets between users in Northern and Southern European countries. This study relies on a longitudinal database derived from Twitter collected between January 2012 and December 2016. We perform a comparative analysis of Southern and Northern European users’ tweets using Bayesian generalized multilevel models together with the Linguistic Inquiry and Word Count software. We analyze the association between regional differences in the strength of family ties and patterns of tweeting about family. Results show that the North-South divide is reflected in the frequency of tweets that are about family; that refer to family in the past versus in the present tense; and that are about close versus extended family.
    Date: 2023–02–06
  26. By: Aiolfi, Simone
    Abstract: The promotion of responsible behavior is one of the main areas of nudging and, more recently, digital nudging. Technologies can enable new forms of horizontal and vertical relationships in a pre-competitive context where negotiating perspectives are overcome by a collective benefit that can generate reputational effects. In this case, the role of Institutions is indispensable, especially in the FMCG sector where there is high intrabrand-competition. Starting from these considerations, the paper explores the potential organizational architectures in the topic of sustainable digital nudging through a critical review of the main national and international initiatives.
    Date: 2023–02–06
  27. By: Fazl Barez; Paul Bilokon; Arthur Gervais; Nikita Lisitsyn
    Abstract: This paper explores the novel deep learning Transformers architectures for high-frequency Bitcoin-USDT log-return forecasting and compares them to the traditional Long Short-Term Memory models. A hybrid Transformer model, called \textbf{HFformer}, is then introduced for time series forecasting which incorporates a Transformer encoder, linear decoder, spiking activations, and quantile loss function, and does not use position encoding. Furthermore, possible high-frequency trading strategies for use with the HFformer model are discussed, including trade sizing, trading signal aggregation, and minimal trading threshold. Ultimately, the performance of the HFformer and Long Short-Term Memory models are assessed and results indicate that the HFformer achieves a higher cumulative PnL than the LSTM when trading with multiple signals during backtesting.
    Date: 2023–02
  28. By: Laura Nurski
    Abstract: The goal is to identify pitfalls in the process of technology adoption and to provide some lessons for both policy and business
    Date: 2023–03
  29. By: Edvinsson, Rodney (Stockholm University); Karlsson, Sune (Örebro University School of Business); Österholm, Pär (Örebro University School of Business)
    Abstract: In this paper, we add new evidence to a long-debated macroeconomic question, namely whether money growth has predictive power for inflation or, put differently, whether money growth Granger causes inflation. We use a historical dataset – consisting of annual Swedish data on money growth and inflation ranging from 1620 to 2021 – and employ state-of-the-art Bayesian estimation methods. Specifically, we employ VAR models with drifting parameters and stochastic volatility which are used to conduct analysis both within- and out-of-sample. Our results indicate that the within-sample analysis – based on marginal likelihoods – provides strong evidence in favour of money growth Granger causing inflation. This strong evidence is, however, not reflected in our out-of-sample analysis, as it does not translate into a corresponding improvement in forecast accuracy.
    Keywords: Time-varying parameters; Stochastic volatility; Out-of-sample forecasts
    JEL: E31 E37 E47 E51 N13
    Date: 2023–02–28

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