nep-pay New Economics Papers
on Payment Systems and Financial Technology
Issue of 2023‒04‒24
seventeen papers chosen by

  1. Cryptocurrency Price Prediction using Twitter Sentiment Analysis By Haritha GB; Sahana N. B
  2. Big techs and the credit channel of monetary policy By Fiorella De Fiore; Leonardo Gambacorta; Cristina Manea
  3. Public money as a store of value, heterogeneous beliefs, and banks: implications of CBDC By Muñoz, Manuel A.; Soons, Oscar
  4. Market Manipulation in NFT Markets By Oh, Sebeom
  5. Commoning with blockchain. The Ğ1 / Duniter case By Maxime Malafosse; Amandine Pascal; Serge Amabile
  6. Social media charity campaigns and pro-social behaviour. Evidence from the Ice Bucket Challenge By Antinyan, Armenak; Corazzini, Luca; Fazio, Andrea; Reggiani, Tommaso; Scervini, Francesco
  7. Why Do Platforms Charge Proportional Fees? Commitment and Seller Participation By Johannes Muthers; Sebastian Wismer
  8. Digital divides among microsized firms: Evidence from Sub-Saharan Africa By Damien GIROLLET
  9. Hegemony or Harmony? A Unified Framework for the International Monetary System By Tao Liu; Dong Lu; Liang Wang
  10. Customers’ Perceptions of FinTech Adaptability in the Islamic Banking Sector: Comparative study on Malaysia and Saudi Arabia By Oladapo, Ibrahim Abiodun; Hamoudah, Manal Mohammed; Alam, Md. Mahmudul; Muda, Ruhaini; Olaopa, Olawale Rafiu
  11. Welfare Cost of Inflation, when Credit Card Transaction Services Are Included among Monetary Services By William Barnett; Sohee Park
  12. Digital Business and Business Model By Matondang, Ryan Nathanael
  13. Displacement and Complementary in the recorded music industry: evidence from France By Marc Ivaldi; Ambre Nicolle; Frank Verboven; Jiekai Zhang
  14. Economic Consequences of Online Tracking Restrictions By Klaus M. Miller; Bernd Skiera
  15. Understanding the paradox of control and freedom of consumption under digital capitalism with Stafford Beer's cybernetic theory By Hannah Bensussan
  16. Estimación del precio de criptomoneda Monero (XMR) basado en modelos matemáticos inferenciales 2019-2021 By Agudelo, Juan López
  17. The changing and growing roles of independent central banks now do require a reconsideration of their mandate By Goodhart, Charles; Lastra, Rosa

  1. By: Haritha GB; Sahana N. B
    Abstract: The cryptocurrency ecosystem has been the centre of discussion on many social media platforms, following its noted volatility and varied opinions. Twitter is rapidly being utilised as a news source and a medium for bitcoin discussion. Our algorithm seeks to use historical prices and sentiment of tweets to forecast the price of Bitcoin. In this study, we develop an end-to-end model that can forecast the sentiment of a set of tweets (using a Bidirectional Encoder Representations from Transformers - based Neural Network Model) and forecast the price of Bitcoin (using Gated Recurrent Unit) using the predicted sentiment and other metrics like historical cryptocurrency price data, tweet volume, a user's following, and whether or not a user is verified. The sentiment prediction gave a Mean Absolute Percentage Error of 9.45%, an average of real-time data, and test data. The mean absolute percent error for the price prediction was 3.6%.
    Date: 2023–03
  2. By: Fiorella De Fiore; Leonardo Gambacorta; Cristina Manea
    Abstract: We document some stylized facts on big tech credit and rationalize them through the lens of a model where big techs facilitate matching on the e-commerce platform and extend loans. The big tech reinforces credit repayment with the threat of exclusion from the platform, while bank credit is secured against collateral. Our model suggests that: (i) a rise in big techs' matching efficiency increases the value for firms of trading on the platform and the availability of big tech credit; (ii) big tech credit mitigates the initial response of output to a monetary shock, while increasing its persistence; (iii) the efficiency gains generated by big techs are limited by the distortionary fees collected from users.
    Keywords: Big Techs, monetary policy, credit frictions
    JEL: E44 E51 E52 G21 G23
    Date: 2023–04
  3. By: Muñoz, Manuel A.; Soons, Oscar
    Abstract: The bulk of euro-denominated cash is held for store of value purposes, with such holdings sharply increasing in times of high economic uncertainty. We develop a Diamond and Dy-bvig model with public money as a store of value and heterogeneous beliefs about bank stability that accounts for this evidence. Consumers who are sufficiently pessimistic prefer to hold cash. In our model, the introduction of a central bank digital currency (CBDC) as a store of value that is superior to cash leads to bank disintermediation as some depositors opt for switching to CBDC based on their beliefs. While CBDC partially replaces deposits, long-term lending decreases less than proportionally as remaining depositors are, on aver-age, more optimistic about bank stability and banks re-balance their portfolio accordingly. The appropriate calibration of CBDC design features such as remuneration and quantity limits can mitigate these effects. We study the individual and social welfare implications of introducing CBDC as a store of value. JEL Classification: E41, E58, G11, G21
    Keywords: bank disintermediation, bank stability, cash, central bank digital currency, welfare
    Date: 2023–03
  4. By: Oh, Sebeom
    Abstract: Non-Fungible Tokens (NFTs) are a new form of digital asset used for fundraising purposes, similar to equity crowdfunding, but within an unregulated environment. The NFT market has been described as an unregulated and prone to misconduct, but there is a lack of detailed analysis on such behaviors. This paper examines the use of manipulative trading, specifically unrevealed insider trading and wash trading, within the NFT market using publicly available transaction data on the Ethereum blockchain. The results show that insiders buying behavior strongly predicts higher future price returns. Even if the circulated USD amount in wash trades is more than 422 million, wash trades fails to impact meaningful market outcomes. I find that some investors engage in wash trading to earn rewards from NFT marketplaces or promote emerging marketplaces in competition with the dominant platform.
    Keywords: Blockchain; NFT; Manipulative Trading; Insider Trading; Wash Trading
    JEL: G14 G28
    Date: 2023–03–22
  5. By: Maxime Malafosse (LEST - Laboratoire d'Economie et de Sociologie du Travail - AMU - Aix Marseille Université - CNRS - Centre National de la Recherche Scientifique, CERGAM - Centre d'Études et de Recherche en Gestion d'Aix-Marseille - AMU - Aix Marseille Université - UTLN - Université de Toulon); Amandine Pascal (LEST - Laboratoire d'Economie et de Sociologie du Travail - AMU - Aix Marseille Université - CNRS - Centre National de la Recherche Scientifique); Serge Amabile (CERGAM - Centre d'Études et de Recherche en Gestion d'Aix-Marseille - AMU - Aix Marseille Université - UTLN - Université de Toulon)
    Abstract: The rise of the internet and peer-to-peer networks have fostered the formation of communities around new collective projects that bring Ostrom's (1990) work on the commons back to the forefront. From this perspective, a new field of specific research suggests that blockchain technology can support commons governance. Studies are still rare and remain very theoretical. The objective of this article is to study the actual use of this technology in the process of commoning. To do so, this paper relies on the case study of the Ğ1, a French free/libre cryptocurrency. Our results detail the governance arrangements of a new type of commons developed by members of the Ğ1 libre currency; the socio-technical system of money creation. In doing so, this case highlights the attributes of the Duniter blockchain specifically developed for the needs of the Ğ1 ecosystem. It also outlines the role of the blockchain in supporting self-organization and the bundles of rights that members have put in place to allocate the universal dividend.
    Abstract: L'essor d'internet et des réseaux pair-à-pair ont favorisé la constitution de communautés autour de nouveaux projets collectifs qui remettent au premier plan les travaux sur les communs d'Ostrom (1990). Dans cette perspective, un nouveau champ de recherches s'intéresse au rôle de la technologie blockchain comme support de la gouvernance des communs. Ces recherches, encore peu nombreuses, sont essentiellement théoriques. Cet article se fixe ainsi comme objectif d'étudier l'utilisation concrète de cette technologie dans le processus de faire commun. Pour ce faire, cet article s'appuie sur l'étude du cas de la monnaie libre Ğ1. Nos résultats présentent en détail les modalités de gouvernance d'un nouveau type de commun développé par les membres de la monnaie libre Ğ1 : le dispositif socio-technique de création monétaire. Ce cas est intéressant car il permet de mettre en exergue les attributs de la blockchain Duniter spécifiquement développée pour les besoins de l'écosystème Ğ1. Il souligne également le rôle de cette blockchain pour soutenir l'auto-organisation du projet et, notamment, les faisceaux de droits que les membres ont mis en place afin d'allouer le dividende universel et le processus de faire commun.
    Keywords: Commons-Based Peer Production (CBPP), Commons, Blockchain, Ostrom, Money, création monétaire, governance, DLT, Distributed ledger technology, Communs, Production par les pairs sur la base des communs, Monnaie Libre Ğ1., gouvernance
    Date: 2022
  6. By: Antinyan, Armenak (Cardiff Business School, Cardiff University.); Corazzini, Luca; Fazio, Andrea; Reggiani, Tommaso (Cardiff Business School); Scervini, Francesco
    Abstract: Social media use plays an important role in shaping individuals' social attitudes and economic behaviours. One of the fist well-known examples of social media campaigns is the Ice Bucket Challenge (IBC), a charity campaign that went viral on social media networks in August 2014, aiming to collect money for research on amyotrophic lateral sclerosis (ALS). We rely on UK longitudinal data to investigate the causal impact of the Ice Bucket Challenge on pro-social behaviours. In detail, this study shows that having been exposed to the IBC increases the probability of donating money, and it also increases the amount of money donated among those who donate at most £100. We also find that exposure to the IBC has increased the probability of volunteering and the level of interpersonal trust. However, all these results, except for the result on the intensive margins of donations, are of short duration and are limited to less than one year. This supports the prevalent consensus that social media campaigns may have only short-term effects.
    Keywords: Donations, Volunteering, Altruism, Social media campaigns, Ice bucket challenge.
    JEL: D64 O35
    Date: 2023–04
  7. By: Johannes Muthers; Sebastian Wismer
    Abstract: This paper deals with trade platforms whose operators not only allow third party sellers to offer their products to consumers, but also offer products themselves. In this context, the platform operator faces a hold-up problem if he uses classical twopart tariffs only as potential competition between the platform operator and sellers reduces platform attractiveness. Since some sellers refuse to join the platform, some products that are not known to the platform operator will not be offered at all. We find that revenue-based fees lower the platform operator’s incentives to compete with sellers, increasing platform attractiveness. Therefore, charging such proportional fees can be profitable, which may explain why several trade platforms indeed charge proportional fees.
    Keywords: Intermediation, Platform Tariff, Hold-Up Problem
    JEL: D40 L14 L81
    Date: 2023–03
  8. By: Damien GIROLLET
    Abstract: TThis paper explores digital inequalities in access and usage among 3, 300 firms and entrepreneurs from eight sub-Saharan African countries. To account for informal firms’ heterogeneity, we identify three segments: an upper tier of top performers, a lower tier of survivalists, and an intermediate segment composed of constrained gazelles. Although digital technologies are already used by most of the informal entrepreneurs in Sub-Saharan Africa, our findings suggest that the diffusion of these new technologies is uneven across informal firms, digital inequalities being rooted in the already existing socioeconomic inequalities. Indeed, digital inequalities align with the hierarchy of informal sectors in each country and are associated with entrepreneurs’ and firms’ characteristics. Using multivariate analysis, we find that gender and rural/urban digital divides persist in the productive sphere. At the same time, firms with a high level of informality, low profits, precarious operating conditions, and no access to financial services are less likely to use digital technologies.
    Keywords: Digital technology, ICT, digital divide, informality, Africa.
    JEL: D22 O17 O33 O55
    Date: 2023
  9. By: Tao Liu (Central University of Finance and Economics); Dong Lu (Renmin University of China); Liang Wang (University of Hawaii Manoa)
    Abstract: There have been two competing views on the structure of the international monetary system. One sees it as a unipolar system with a dominant currency, such as the U.S. dollar, while the other argues that multiple international currencies can coexist. Aiming to provide a unified theoretical framework to reconcile these two views, we develop a micro-founded monetary model to examine the interactions of two essential roles played by international currencies, the medium of exchange and the store of value, and highlight the importance of abundant safe asset supplies. When the two roles of international currencies reinforce each other, a unipolar equilibrium exists. However, when one currency is unable to serve as sufficient safe assets for international trade transactions, the two roles work against each other. Agents have the incentive to diversify their portfolio and we have a multipolar system. The effects of monetary policy, fiscal policy, and their combinations crucially depend on the total supply of safe assets and the relative importance of the two functions of international currencies. The structure of the international monetary system could be influenced by various policies such as monetary policy, fiscal policy, and financial sanctions. We also discuss welfare under different equilibria and the effect of financial sanctions on the dominant currency in a unipolar world.
    Keywords: International, Money, Multipolar, Safe Assets, Unipolar
    JEL: E42 E52 F33 F40
    Date: 2023–03
  10. By: Oladapo, Ibrahim Abiodun; Hamoudah, Manal Mohammed; Alam, Md. Mahmudul (Universiti Utara Malaysia); Muda, Ruhaini; Olaopa, Olawale Rafiu
    Abstract: Purpose – This paper aims to compare the perceptions of Islamic bank customers concerning FinTech services in Malaysia and Saudi Arabia. It also investigates the level to which customers are willing to adapt FinTech services. Design/methodology/approach – Primary data were collected from May to September 2019 using a questionnaire to survey 102 Islamic bank customers in Malaysia, and 147 in Saudi Arabia.The data are analysed based on Structural Equation Modelling (SEM) using the partial least squares (PLS) approach. Findings – The findings show that knowledge, attitude, and subjective norms are the highly significant determining factors that influence customers’ opinions on adapting to new technology, but awareness demonstrates only a moderately positive effect. Moreover, the impact of these factors on the intention to adopt FinTech services significantly differs between Malaysian and Saudi Arabian customers. Originality/value – This is an original study based on primary data on customers of Islamic banking in Malaysia and Saudi Arabia. It provides some novel insights into how the Islamic banking industry can boost customers’ confidence and enhance their patronage by adopting FinTech in their business operation model. These findings should be of value to managers, policymakers, and regulators in the Islamic banking industry in both Muslim and non-Muslim countries.
    Date: 2022–03–08
  11. By: William Barnett (Department of Economics, University of Kansas and Center for Financial Stability, New York City); Sohee Park (Department of Economics, Valparaiso University, Valparaiso, IN 46383, USA)
    Abstract: We investigate the welfare cost of anticipated inflation, when the volume of credit card transactions is included in measured monetary service flows. We use the credit-card-augmented Divisia monetary aggregates in a nonlinear dynamic stochastic general equilibrium (DSGE) New Keynesian model and calculate the welfare costs of inflation. The welfare costs of inflation with credit card services included are greater than without them in the New Keynesian DSGE model. Because of the complexity of the model’s dynamical structure, we are not aware of a simple explanation for the increased welfare sensitivity to inflation.
    Keywords: Welfare Cost, Divisia, Credit-Card-Augmented Divisia, Monetary Aggregates, Money Demand, Inflation, nonlinear dynamics.
    JEL: E31 E41 E51 E52
    Date: 2023–04
  12. By: Matondang, Ryan Nathanael
    Abstract: Kata E-commerce merupakan singkatan dari kata electronic dan commerce. Secara singkat arti dari e-commerce adalah perdagangan elektronik. Namun jika diartikan lebih jauh e-commerce bisa berarti segala kegiatan perdagangan yang meliputi proses pemasaran hingga distribusi barang atau jasa yang dilakukan secara online atau melalui jaringan elektronik. E-commerce menyediakan suatu kemudahan untuk menjual dan membeli produk serta informasi melalui internet atau sarana lainnya tanpa terbatas oleh area geografis.
    Date: 2023–03–03
  13. By: Marc Ivaldi (TSE-R - Toulouse School of Economics - UT Capitole - Université Toulouse Capitole - Université Fédérale Toulouse Midi-Pyrénées - EHESS - École des hautes études en sciences sociales - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement); Ambre Nicolle (LMU Munich School of Management - LMU - Ludwig-Maximilians-Universität München); Frank Verboven (KU Leuven - Catholic University of Leuven - Katholieke Universiteit Leuven); Jiekai Zhang (Helsinki School of Economics)
    Abstract: Do new digital consumption channels of music depress sales in old physical ones, or are they complementary? To answer this question, we exploit product-level variation in sales and prices of over 4 million products, observed weekly between 2014 and 2017 for the entire French market. A unique feature of our data is that we observe sales for both physical and digital products, as well as streaming consumption. At the track-level, we find that streaming displaces digital sales. At the more aggregate artist-level, digital sales displace physical sales, but streaming implies a promotional effect on physical sales. This complementarity is driven by popular genres, i.e., Pop and Variety. Most of our findings are robust to whether we consider the hits or include the products that belong to the long tail. Our findings bridge two streams of literature as we show that displacement between consumption channels at the product level can coexist with complementarity at a more aggregate level.
    Keywords: Digitization, Music industry, Music consumption, Streaming
    Date: 2023–01
  14. By: Klaus M. Miller; Bernd Skiera
    Abstract: In recent years, European regulators have debated restricting the time an online tracker can track a user to protect consumer privacy better. Despite the significance of these debates, there has been a noticeable absence of any comprehensive cost-benefit analysis. This article fills this gap on the cost side by suggesting an approach to estimate the economic consequences of lifetime restrictions on cookies for publishers. The empirical study on cookies of 54, 127 users who received 128 million ad impressions over 2.5 years yields an average cookie lifetime of 279 days, with an average value of EUR 2.52 per cookie. Only 13% of all cookies increase their daily value over time, but their average value is about four times larger than the average value of all cookies. Restricting cookies lifetime to one year (two years) decreases their lifetime value by 25% (19%), which represents a decrease in the value of all cookies of 9% (5%). In light of the EUR 10.60 billion cookie-based display ad revenue in Europe, such restrictions would endanger EUR 904 million (EUR 576 million) annually, equivalent to EUR 2.08 (EUR 1.33) per EU internet user. The article discusses these results' marketing strategy challenges and opportunities for advertisers and publishers.
    Date: 2023–03
  15. By: Hannah Bensussan (CEPN - Centre d'Economie de l'Université Paris Nord - LABEX ICCA - UP13 - Université Paris 13 - Université Sorbonne Nouvelle - Paris 3 - CNRS - Centre National de la Recherche Scientifique - UPCité - Université Paris Cité - Université Sorbonne Paris Nord - CNRS - Centre National de la Recherche Scientifique - Université Sorbonne Paris Nord)
    Abstract: Studies on the digitalization of markets and economic relations provide contrasting statements on its impact on consumers: it seems to have enhanced both control and freedom of these actors. This paper proposes to understand this paradox through the lens of Stafford Beer's cybernetic theory. We read the literature on digitalization and consumption at the light of Beer's concepts of regulated variety, regulatory variety and recursion, three concepts at the source of Beer's understanding of control and freedom. These concepts, we argue, allow to show the conditioned rise of consumers' freedom to the purpose of control in capitalist orders, i.e., commodity circulation and capital accumulation.
    Keywords: Control, freedom, consumption, digital capitalism
    Date: 2023–03–29
  16. By: Agudelo, Juan López
    Abstract: La propuesta de estimación del precio de comercialización de la criptomoneda Monero (XMR), partió de la observación de una muestra en nodos de los mercados globales, con información histórica del periodo 2019-2021, y proyección en modelos matemáticos inferenciales. La política blockchain predijo una variabilidad positiva de 62% para el activo, y su equivalencia en dólares americanos hacia el último trimestre del año 2021; de entre 123 US$ hasta 212 US$ por unidad no fiduciaria. La bondad de ajuste del alisado exponencial doble se evidenció en el coeficiente de ajuste R2=0.792, en la tasación proyectada; con nivel de confianza del 97%. Mientras, el ajuste multivariado influyó positivamente en el incremento del valor de la criptomoneda en 72%. La evolución del precio del token explicó una variabilidad positiva de 9.12%; pasando de 401 US$ a 419 US$ en promedio. Si el umbral límite superior alcanza los 220 US$/XMR, la recomendación es a cambiar su valor por una moneda fiduciaria; posteriormente esperar a una caída brusca por debajo de los 160 US$, para la compra de XMR. Este es el escenario de rentabilidad ideal para el inversor en criptomonedas durante el periodo 2022.
    Date: 2022–03–18
  17. By: Goodhart, Charles; Lastra, Rosa
    Abstract: In this paper, we analyse why the changing and growing roles of independent Central Banks now do require a reconsideration of their mandate.
    Keywords: accountability; central banking; financial stability; independence; monetary policy
    JEL: M40 J1
    Date: 2023–02–27

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