nep-pay New Economics Papers
on Payment Systems and Financial Technology
Issue of 2023‒06‒19
35 papers chosen by

  1. The Rise of E-Wallets and Buy-Now-Pay-Later: Payment Competition, Credit Expansion, and Consumer Behavior By Wenlong Bian; Lin William Cong; Yang Ji
  2. The Financial Stability Implications of Digital Assets By Garth Baughman; Francesca Carapella; David E. Rappoport; Chiara Scotti; Nathan Swem; Alexandros Vardoulakis
  3. Nigeria’s eNaira, One Year After By Jookyung Ree
  4. Female unemployment, mobile money innovations and doing business by females By Simplice A. Asongu; Nicholas M. Odhiambo
  5. How does an incumbent news media organization become a platform? Employing intra-firm synergies to launch the platform business model in a news agency By Jääskeläinen, Atte; Yanatma, Servet; Ritala, Paavo
  6. Decentralized Finance (DeFi): Transformative Potential & Associated Risks By Francesca Carapella; Nathan Swem
  7. Personality Traits and Financial Outcomes By Claire Greene; Oz Shy; Joanna Stavins
  8. Exploring interdependent privacy – Empirical insights into users’ protection of others’ privacy on online platforms By Franz, Anjuli; Benlian, Alexander
  9. Weighing Anchor on Credit Card Debt By Benedict Guttman-Kenney; Jesse Leary; Neil Stewart
  10. Will Central Bank Digital Currency Disintermediate Banks? By Whited, Toni M.; Wu, Yufeng; Xiao, Kairong
  11. Patents and intellectual property assets as non-fungible tokens: key technologies and challenges By Seyed Mojtaba Hosseini Bamakan; Nasim Nezhadsistani; Omid Bodaghi; Qiang Qu
  12. Technology, Innovation, and Financial Services: At the VenCent Fintech Conference, Little Rock, Arkansas August 17th 2022 By Michelle W. Bowman
  13. Africa's emergent tech sector: It's characteristics impact on development and labour markets By Lay, Jann; Tafese, Tevin
  14. The U.S. Dollar and Central Bank Digital Currencies: At "Digital Currencies and National Security Tradeoffs, " a symposium presented by the Harvard National Security Journal, Cambridge, Massachusetts October 14th 2022 By Christopher J. Waller
  15. The fundamental value of art NFTs By Fridgen, Gilbert; Kräussl, Roman; Papageorgiou, Orestis; Tugnetti, Alessandro
  16. Non-fungible token: Overview and use cases By Diefenbach, Carolin
  17. La blockchain dans l'organisation du transport fluvial, une approche par la théorie de l'agence By Mathieu Lesueur-Cazé; Laurent Bironneau; Thierry Morvan
  18. Finfluencers By Ali Kakhbod; Seyed Mohammad Kazempour; Dmitry Livdan; Norman Schuerhoff
  19. Don't Trust, Verify: Towards a Framework for the Greening of Bitcoin By Juan Ignacio Iba\~nez; Alexander Freier
  20. Managing the Promise and Risk of Financial Innovation.: At D.C. Fintech Week, Washington, D.C. October 12th 2022 By Michael S. Barr
  21. BigTech credit and monetary policy transmission: Micro-level evidence from China By Huang, Yiping; Li, Xiang; Qiu, Han; Yu, Changhua
  22. L'émergence des blockchain au sein des chaînes logistiques : apports conceptuels de la théorie des coûts de transaction By Mathieu Lesueur-Cazé; Laurent Bironneau; Thierry Morvan
  23. A Model of Influencer Economy By Lin William Cong; Siguang Li
  24. The Market for Ethical Goods By Martin Peitz; Susumu Sato
  25. The performance of marketplace lenders By Kräussl, Roman; Kräussl, Zsofia; Pollet, Joshua M.; Rinne, Kalle
  26. Etude exploratoire de l'adoption de la blockchain par un distributeur alimentaire : une analyse par les coûts de transaction By Mathieu Lesueur-Cazé; Laurent Bironneau; Thierry Morvan
  27. Data Privacy and Algorithmic Inequality By Zhuang Liu; Michael Sockin; Wei Xiong
  28. Determinants of Financial Inclusion in Africa and OECD Countries By Evzen Kocenda; Samuel Fiifi Eshun
  29. Cloud Service Marketing Strategy Framework for Higher Value Customer-Segments Deployment By Alfarisi, Omar
  30. Interbank Networks and the Interregional Transmission of Financial Crises: Evidence from the Panic of 1907 By Matthew S. Jaremski; David C. Wheelock
  31. Essays on the Adoption and Diffusion of Big Data Analytics and Artificial Intelligence Technology By Nicolas Ameye
  32. The Macroeconomic Implications of CBDC: A Review of the Literature By Sebastian Infante; Kyungmin Kim; André F. Silva; Robert J. Tetlow
  33. Forecasting banknote circulation during the COVID-19 pandemic using structural time series models By Nikolaus Bartzsch; Marco Brandi; Lucas Devigne; Raymond de Pastor; Gianluca Maddaloni; Diana Posada Restrepo; Gabriele Sene
  34. Essay on Non-linear Pricing in E-commerce By Dipankar Das; Vivek Sharadadevi Jadhav
  35. The Evolving Nature of Banking, Bank Culture, and Bank Runs: A speech at the 21st Annual Symposium on Building the Financial System of the 21st Century: An Agenda for Europe and the United States, European Central Bank, Frankfurt, Germany, May 12th 2023 By Michelle W. Bowman

  1. By: Wenlong Bian; Lin William Cong; Yang Ji
    Abstract: The past decade has witnessed a phenomenal rise of digital wallets, and the COVID-19 pandemic further accelerated their adoption globally. Such e-wallets provide not only a conduit to external bank accounts but also internal payment options, including the ever-popular Buy-Now-Pay-Later (BNPL). We examine, for the first time, e-wallet transactions matched with merchant and consumer information from a world-leading provider based in China, with over 1 billion users globally and a business model that other e-wallet providers quickly converge to. We document that internal payment options, especially BNPL, dominate both online and on-site transactions. BNPL has greatly expanded credit access on the extensive margin through its adoption in two-sided payment markets. While BNPL crowds out other e-wallet payment options, it expands FinTech credit to underserved consumers. Exploiting a randomized experiment, we also find that e-wallet credit through BNPL substantially boosts consumer spending. Nevertheless, users, especially those relying on e-wallets as their sole credit source, carefully moderate borrowing when incurring interest charges. The insights likely prove informative for economies transitioning from cash-heavy to cashless societies where digital payments and FinTech credit see the largest growth and market potential.
    JEL: E42 G20 G23 G51
    Date: 2023–05
  2. By: Garth Baughman; Francesca Carapella; David E. Rappoport; Chiara Scotti; Nathan Swem; Alexandros Vardoulakis
    Abstract: The value of assets in the digital ecosystem has grown rapidly, amid periods of high volatility. Does the digital financial system create new potential challenges to financial stability? This paper explores this question using the Federal Reserve’s framework for analyzing vulnerabilities in the traditional financial system. The digital asset ecosystem has recently proven itself highly fragile. However adverse digital asset markets shocks have had limited spillovers to the traditional financial system. Currently, the digital asset ecosystem does not provide significant financial services outside the ecosystem, and it exhibits limited interconnections with the traditional financial system. The paper describes emerging vulnerabilities that could present risks to financial stability in the future if the digital asset ecosystem becomes more systemic, including: run risks among large stablecoins, valuation pressures in crypto-assets, fragilities of DeFi platforms, growing interconnectedness, and a general lack of regulation.
    Keywords: digital assets; financial stability; financial vulnerabilities; stablecoins; systemic risk; defi
    JEL: E42 G13 G01
    Date: 2022–08
  3. By: Jookyung Ree
    Abstract: This paper reflects on the first year of the eNaira—the first CBDC in Africa. Despite the laudable undisrupted operation for the first full year, the CBDC project has not yet moved beyond the initial wave of limited adoption. Network effects suggest the initial low adoption spell will require a coordinated policy drive to break it. The eNaira’s potential in financial inclusion requires a strategy to set the right relationship with mobile money, given the former’s potential to either complement or substitute the latter. Cost savings from integrating CBDC—as a bridge vehicle—in the remittance process may also be substantial.
    Keywords: Central Bank Digital Currency; financial inclusion; remittance; blockchain; mobile money
    Date: 2023–05–16
  4. By: Simplice A. Asongu (Yaounde, Cameroon); Nicholas M. Odhiambo (Pretoria, South Africa)
    Abstract: The purpose of this study is to complement extant literature by examining how mobile money innovations can moderate the unfavorable incidence of female unemployment on female doing of business in 44 countries from sub-Saharan Africa for the period 2004 to 2018. The empirical evidence is based on interactive quantile regressions. The employed doing business constraints are the procedures a woman has to go through to start a business and the time for women to set up a business, while the engaged mobile money innovations are: (i) registered mobile money agents (registered mobile money agents per 1000 km2 and registered mobile money agents per 100 000 adults) and (ii) active mobile money agents (active mobile money agents per 1000 km2 and active mobile money agents per 100 000 adults). The hypothesis that mobile money innovation moderates the unfavorable incidence of female unemployment on business constraints is overwhelmingly invalid. The invalidity of the tested hypothesis is clarified, and the policy implications are discussed.
    Keywords: Mobile phones; financial inclusion; women; doing business; sub-Saharan Africa
    JEL: G20 O40 I10 I20 I32
    Date: 2023–01
  5. By: Jääskeläinen, Atte; Yanatma, Servet; Ritala, Paavo
    Abstract: Digital platforms have disrupted traditional news organizations, with new platform-based models gaining ground. However, the incumbents can defend their positions and reap the benefits of multi-sided market structures by establishing a platform business model themselves. We examine a case study of the Austrian News Agency (APA), which gradually formulated a strategy that resulted in a platform-based business model. Platform features were strategized and innovated over time and in phases, with the intent of creating value for customers on both sides of the platform. We found that APA’s platform transformation was enabled by a visionary value proposition backed by a trusted institution’s legitimacy and a co-operative organizational model that provided added incentives for the participating news media companies. The strategy and the business model emerged on the basis of external developments and internal realizations concerning the feasibility of the new platform strategy. Based on our results, we develop a framework for an incumbent strategy formation process towards a platform business model. This framework demonstrates the incumbent organization’s emergent, as well as deliberate, strategic ability to introduce platform features into its business model, based on unique intra-firm synergies with established parts of the business, and highlighting a potential for “incumbent advantage.”
    Keywords: platform business model; digital platform; strategy; platformization; news media; Austrian News agency; Knowledge Exchange and Impact Fund
    JEL: R14 J01
    Date: 2021–11–18
  6. By: Francesca Carapella; Nathan Swem
    Abstract: Decentralized finance (DeFi) refers to a set of newly emerging financial products and services that operate on decentralized platforms using blockchains to record and share data. DeFi products and services are conducted without a trusted central intermediary such as a bank, and they include payments, lending and borrowing, trading and investments, capital raising (crowdfunding), and insurance. An important innovation that allowed for the development of DeFi was the growth of programming capability on blockchains. This innovation allows for the creation of computer code called smart contracts that can be invoked by users without going through a centralized intermediary. DeFi may pose financial stability risks, that are exacerbated by the fact that both are currently largely outside the prudential regulatory perimeter, which we discuss.
    Keywords: Blockchain; Crypto; DeFi; Financial stability and risk
    Date: 2022–08–30
  7. By: Claire Greene; Oz Shy; Joanna Stavins
    Abstract: The Big Five personality traits—openness to experience, conscientiousness, extroversion, agreeableness, and neuroticism—are widely used in understanding human behavior. Using data collected from a survey and diary of consumer payment choice, we investigate how the Big Five traits affect three financial outcomes: being unbanked, holding a credit card, and carrying credit card debt. Although each personality trait is correlated with each of the financial outcomes we examine, they mostly become statistically insignificant when we control for demographics and income in regressions. Carrying credit card debt (revolving), however, is significantly affected by conscientiousness, openness, and agreeableness: Credit card adopters who are less conscientious, more open to experiences, or more agreeable are significantly more likely to revolve credit card debt. A machine learning algorithm confirms that conscientiousness is the major factor separating revolvers from other credit cardholders.
    Keywords: credit card debt; consumer payments; personality traits; financial behavior; unbanked
    JEL: D12 D14 E42
    Date: 2023–03–01
  8. By: Franz, Anjuli; Benlian, Alexander
    Date: 2022–07–25
  9. By: Benedict Guttman-Kenney; Jesse Leary; Neil Stewart
    Abstract: We find it is common for consumers who are not in financial distress to make credit card payments at or close to the minimum. This pattern is difficult to reconcile with economic factors but can be explained by minimum payment information presented to consumers acting as an anchor that weighs payments down. Building on Stewart (2009), we conduct a hypothetical credit card payment experiment to test an intervention to de-anchor payment choices. This intervention effectively stops consumers selecting payments at the contractual minimum. It also increases their average payments, as well as shifting the distribution of payments. By de-anchoring choices from the minimum, consumers increasingly choose the full payment amount - which potentially seems to act as a target payment for consumers. We innovate by linking the experimental responses to survey responses on financial distress and to actual credit card payment behaviours. We find that the intervention largely increases payments made by less financially-distressed consumers. We are also able to evaluate the potential external validity of our experiment and find that hypothetical responses are closely related to consumers' actual credit card payments.
    Date: 2023–05
  10. By: Whited, Toni M. (University of Michigan and the NBER); Wu, Yufeng (University of Illinois); Xiao, Kairong (Columbia University)
    Abstract: We estimate a dynamic banking model to quantify the impact of a central bank digital currency (CBDC) on the banking system. Our counterfactuals show that a one-dollar introduction of CBDC replaces bank deposits by around 80 cents on the margin. Bank lending falls by one-fourth of the drop in deposits because banks partially replace lost deposits with wholesale funding. This substitution raises banks’ interest-rate risk exposure and lowers their resilience to negative equity shocks. If CBDC bears interest or is intermediated through banks, it captures a greater deposit market share, amplifying the impact on lending. The effect on lending is ampliï¬ ed for small banks, for which wholesale funding is more expensive.
    Keywords: central bank digital currency, banking competition, maturity mismatch, ï¬ nancial stability
    JEL: E51 E52 G21 G28
    Date: 2023–05
  11. By: Seyed Mojtaba Hosseini Bamakan; Nasim Nezhadsistani; Omid Bodaghi; Qiang Qu
    Abstract: With the explosive development of decentralized finance, we witness a phenomenal growth in tokenization of all kinds of assets, including equity, funds, debt, and real estate. By taking advantage of blockchain technology, digital assets are broadly grouped into fungible and non-fungible tokens (NFT). Here non-fungible tokens refer to those with unique and non-substitutable properties. NFT has widely attracted attention, and its protocols, standards, and applications are developing exponentially. It has been successfully applied to digital fantasy artwork, games, collectibles, etc. However, there is a lack of research in utilizing NFT in issues such as Intellectual Property. Applying for a patent and trademark is not only a time-consuming and lengthy process but also costly. NFT has considerable potential in the intellectual property domain. It can promote transparency and liquidity and open the market to innovators who aim to commercialize their inventions efficiently. The main objective of this paper is to examine the requirements of presenting intellectual property assets, specifically patents, as NFTs. Hence, we offer a layered conceptual NFT-based patent framework. Furthermore, a series of open challenges about NFT-based patents and the possible future directions are highlighted. The proposed framework provides fundamental elements and guidance for businesses in taking advantage of NFTs in real-world problems such as grant patents, funding, biotechnology, and so forth.
    Date: 2023–03
  12. By: Michelle W. Bowman
    Date: 2022–08–17
  13. By: Lay, Jann; Tafese, Tevin
    Abstract: This study investigates the characteristics of Africa's tech sector, its digital services, and its impact on economic development, specifically on labour markets. Our literature review and new analyses based on a database of African startups shows that Africa's emergent tech sector is adapting to the continent's constraints on development and, sometimes, contributes to overcoming them. A case in point is the credit constraints that numerous startups have overcome to attract very significant amounts of capital. Tech startups tend to be concentrated in financial services in the "Big Four": Egypt, Kenya, South Africa, and Nigeria. We show, first, that "home-grown" African platform businesses do not simply connect demand and supply, but also invest in logistics and infrastructure; second, that many tech firms offer multiple products that complement the original service; and third, that business models often rely on large networks of agents. We conclude that more evidence on the impact of digital technologies is needed.
    Keywords: Africa, digitalisation, startups, development, labour markets, ICT
    JEL: N27 M13 J40 L86
    Date: 2023
  14. By: Christopher J. Waller
    Date: 2022–10–14
  15. By: Fridgen, Gilbert; Kräussl, Roman; Papageorgiou, Orestis; Tugnetti, Alessandro
    Abstract: This paper examines the level of speculation associated with art non-fungible tokens (NFTs), comprehends the characteristics that confer value on them and designs a profitable trading strategy based on our findings. We analyze 860, 067 art NFTs that have been deployed on the Ethereum blockchain and have been involved in 317, 950 sales using machine learning methods to forecast the probability of sale, the trade frequency and the average price. We find that NFTs are highly speculative assets and that their price and recurrence of sale are heavily determined by the floor and the last sales prices, independent of any fundamental value.
    Keywords: Non-fungible tokens (NFTs), Machine Learning, Fundamental Value, Speculation, Ethereum, Blockchain, Non-fungible tokens (NFTs)
    JEL: C55 G11 Z11
    Date: 2023
  16. By: Diefenbach, Carolin
    Abstract: Due to the rapid growth experienced by the market for non-fungible tokens in 2021, the topic has become much more present. Even people who have not previously dealt with the topic of cryptoassets are finding interest in it. What exactly is hidden behind the term NFT, which areas of application there are and in which direction crypto tokens are developing will be briefly presented in this article. Significant changes on the market and in the technological field will be highlighted, as well as opportunities and challenges.
    Keywords: crypto-assets, virtual assets, non-fungible token, smart contracts, blockchain, proof of work, proof of stake
    Date: 2023
  17. By: Mathieu Lesueur-Cazé (CREM - Centre de recherche en économie et management - UNICAEN - Université de Caen Normandie - NU - Normandie Université - UR - Université de Rennes - CNRS - Centre National de la Recherche Scientifique); Laurent Bironneau (CREM - Centre de recherche en économie et management - UNICAEN - Université de Caen Normandie - NU - Normandie Université - UR - Université de Rennes - CNRS - Centre National de la Recherche Scientifique); Thierry Morvan (CREM - Centre de recherche en économie et management - UNICAEN - Université de Caen Normandie - NU - Normandie Université - UR - Université de Rennes - CNRS - Centre National de la Recherche Scientifique)
    Abstract: In the same way as the Internet was for the end of the 20th century, blockchain seems to be a major innovation of the 21st century. Blockchain technology is helping to support supply chain management approaches and in particular collaborative practices. However, the latter are crossed by conflicting relationships that are sources of risk and require the implementation of control and incentive mechanisms. In this context, this paper aims at answering the following question by mobilizing the agency theory as an analysis grid: How to create blockchain solutions that allow to reduce the necessary level of trust and increase the transparency of information within supply chains? To do so, we rely on an action research conducted with a River Network Manager (RNM).
    Abstract: À l'égard de ce que fut Internet pour la fin du XXème siècle, la blockchain semble constituer une innovation majeure du 21ème Siècle. La technologie blockchain contribue à accompagner les approches supply chain management et notamment les pratiques collaboratives. Cependant, ces dernières sont traversées par des relations conflictuelles sources de risques nécessitant la mise en place de dispositifs de contrôle et de mécanismes d'incitation. Dans ce contexte, cette communication a pour objet de répondre à la question suivante en mobilisant la théorie de l'agence comme grille d'analyse : Comment créer des solutions blockchain qui permettent de réduire le niveau de confiance nécessaire et d'accroître la transparence des informations au sein des chaines logistiques ? Pour ce faire, nous nous appuyons sur une recherche-action menée auprès d'un Gestionnaire de Réseaux Fluviaux (GRF).
    Keywords: Blockchain, Théorie de l’agence, SCM
    Date: 2022–05–18
  18. By: Ali Kakhbod (University of California, Berkeley); Seyed Mohammad Kazempour (Rice University-Jesse H. Jones Graduate School of Business); Dmitry Livdan (University of California, Berkeley); Norman Schuerhoff (Swiss Finance Institute - HEC Lausanne)
    Abstract: Tweet-level data from a social media platform reveals low average accuracy and high dispersion in the quality of advice by financial influencers, or ``finfluencers": 28% of finfluencers are skilled generating 2.6% monthly abnormal returns, 16% are unskilled, and 56% have negative skill (``antiskill'') generating -2.3% monthly abnormal returns. Consistent with homophily shaping finfluencers' social networks, antiskilled have more followers and more influence on retail trading than skilled finfluencers. The advice by antiskilled finfluencers creates overly optimistic beliefs most times and persistent swings in followers' belief bias. Consequently, finfluencers cause excessive trading and inefficient prices such that a contrarian strategy yields 1.2% monthly out-of-sample performance.
    Date: 2023–03
  19. By: Juan Ignacio Iba\~nez; Alexander Freier
    Abstract: For more than a decade, Bitcoin has gained as much adoption as it has received criticism. Fundamentally, Bitcoin is under fire for the high carbon footprint that results from the energy-intensive proof-of-work (PoW) consensus algorithm. There is a trend however for Bitcoin mining to adopt a trajectory toward achieving carbon-negative status, notably due to the adoption of methane-based mining and mining-based flexible load response (FLR) to complement variable renewable energy (VRE) generation. Miners and electricity sellers may increase their profitability not only by taking advantage of excess energy, but also by selling green tokens to buyers interested in greening their portfolios. Nevertheless, a proper ''green Bitcoin'' accounting system requires a standard framework for the accreditation of sustainable bitcoin holdings. The proper way to build such a framework remains contested. In this paper, we survey the different sustainable Bitcoin accounting systems. Analyzing the various alternatives, we suggest a path forward.
    Date: 2023–05
  20. By: Michael S. Barr
    Date: 2022–10–12
  21. By: Huang, Yiping; Li, Xiang; Qiu, Han; Yu, Changhua
    Abstract: This paper studies monetary policy transmission through BigTech and traditional banks. By comparing business loans made by a BigTech bank with those made by traditional banks, it finds that BigTech credit amplifies monetary policy transmission mainly through the extensive margin. Specifically, the BigTech bank is more likely to grant credit to new borrowers compared with conventional banks in response to expansionary monetary policy. The BigTech bank's advantages in information, monitoring, and risk management are the potential mechanisms. In addition, monetary policy has a stronger impact on the real economy through BigTech lending.
    Keywords: Financial Technology, Bank Lending, Monetary Policy Transmission
    JEL: E52 G21 G23
    Date: 2023
  22. By: Mathieu Lesueur-Cazé (CREM - Centre de recherche en économie et management - UNICAEN - Université de Caen Normandie - NU - Normandie Université - UR - Université de Rennes - CNRS - Centre National de la Recherche Scientifique); Laurent Bironneau (CREM - Centre de recherche en économie et management - UNICAEN - Université de Caen Normandie - NU - Normandie Université - UR - Université de Rennes - CNRS - Centre National de la Recherche Scientifique); Thierry Morvan (CREM - Centre de recherche en économie et management - UNICAEN - Université de Caen Normandie - NU - Normandie Université - UR - Université de Rennes - CNRS - Centre National de la Recherche Scientifique)
    Abstract: Dans un environnement se caractérisant par des mutations numériques profondes, objets connectés, big data, plateformes, etc., la blockchain laisse entrevoir un potentiel de changements dans le pilotage des organisations. Différents types de blockchains apparaissent posant la question des modes de gouvernance qu'elles sont susceptibles de privilégier. Aussi, nous avons souhaité analyser l'émergence de cette technologie au sein des organisations en mobilisant la théorie des coûts de transaction comme grille d'analyse, l'objectif étant de faire émerger une typologie des modes de gouvernances susceptibles d'être envisagés pour le pilotage des chaînes logistiques.
    Keywords: Blockchain, modes de gouvernance, coûts de transaction, chaînes logistiques
    Date: 2021–06–09
  23. By: Lin William Cong; Siguang Li
    Abstract: With the rise of social media and streaming platforms, firms and brand-owners increasingly depend on influencers to attract consumers, who care about both common product quality and consumer-influencer interaction. Sellers thus compete in both influencer and product markets. As outreach and distribution technologies improve, influencer payoffs and income inequality change non-monotonically. More powerful influencers sell better-quality products, but pluralism in style mitigates market concentration by effectively differentiating consumer experience. Influencer style dispersion substitutes horizontal product differentiation but serves as either complement (small dispersion) or substitute (large dispersion) to vertical product differentiation. The assortative matching between sellers and influencers remains under endogenous influence-building, with the maximal differentiation principle recovered in the limit of costless style acquisition. Meanwhile, influencers may under-invest in consumer outreach to avoid exacerbating price competition. Finally, while requiring balanced seller-influencer matching can encourage seller competition, uni-directional exclusivity can improve welfare for sufficiently differentiated products and uncrowded influencer markets.
    JEL: L11 L20 L51 M31 M37
    Date: 2023–05
  24. By: Martin Peitz; Susumu Sato
    Abstract: We propose a tractable model of asymmetric platform oligopoly. Users from two distinct groups who are subject to within-group and cross-group network effects decide which platform to join. We characterize the equilibrium when platforms manage user access by setting participation fees. We explore the effects of platform entry, change of incumbent platforms’ quality under free entry, and partial compatibility on market outcomes. We show how the analysis can be extended to partial user participation and zero fees for one of the user groups.
    Keywords: oligopoly theory; aggregative games; network effects; two-sided markets; two-sided single-homing; free entry; compatibility
    JEL: L13 L41 D43
    Date: 2023–05
  25. By: Kräussl, Roman; Kräussl, Zsofia; Pollet, Joshua M.; Rinne, Kalle
    Abstract: We analyze the performance of marketplace lending using loan cash flow data from the largest platform, Lending Club. We find substantial risk-adjusted performance of about 40 basis points per month for the entire loan portfolio. Other loan portfolios grouped by risk category have similar risk-adjusted performance. We show that characteristics of the local bank sector for each loan, such as concentration of deposits and the presence of national banks, are related to the performance of loans. Thus, marketplace lending has the potential to finance a growing share of the consumer credit market in the absence of a competitive response from the traditional incumbents.
    Keywords: Marketplace lending, household finance, financial intermediation, financial innovation, competition
    JEL: G12 G21
    Date: 2023
  26. By: Mathieu Lesueur-Cazé (CREM - Centre de recherche en économie et management - UNICAEN - Université de Caen Normandie - NU - Normandie Université - UR - Université de Rennes - CNRS - Centre National de la Recherche Scientifique); Laurent Bironneau (CREM - Centre de recherche en économie et management - UNICAEN - Université de Caen Normandie - NU - Normandie Université - UR - Université de Rennes - CNRS - Centre National de la Recherche Scientifique); Thierry Morvan (CREM - Centre de recherche en économie et management - UNICAEN - Université de Caen Normandie - NU - Normandie Université - UR - Université de Rennes - CNRS - Centre National de la Recherche Scientifique)
    Abstract: La technologie blockchain semble favoriser l'apparition d'organisations hybrides, dénommées blockchains de consortium. Ces dernières questionnent quant aux modèles de gouvernance à leur appliquer. Dans cet article, et pour répondre à ce questionnement, nous mobilisons les coûts de transaction comme grille d'analyse et nous nous appuyons sur une étude de cas menée auprès d'un distributeur de produits de grande consommation. Il ressort de nos analyses que la blockchain grâce à ses attributs spécifiques est source de confiance, se développe en raison d'un contexte environnemental propice et s'appuie sur un concept innovant qui réside dans la maitrise de l'information. Pour conclure, nous proposons trois étapes dans l'évolution à venir des blockchains.
    Keywords: blockchain, Modes de gouvernance, Coûts de transaction
    Date: 2021–06–09
  27. By: Zhuang Liu; Michael Sockin; Wei Xiong
    Abstract: This paper develops a foundation for a consumer's preference for data privacy by linking it to the desire to hide behavioral vulnerabilities. Data sharing with digital platforms enhances the matching efficiency for standard consumption goods, but also exposes individuals with self-control issues to temptation goods. This creates a new form of inequality in the digital era—algorithmic inequality. Although data privacy regulations provide consumers with the option to opt out of data sharing, these regulations cannot fully protect vulnerable consumers because of data-sharing externalities. The coordination problem among consumers may also lead to multiple equilibria with drastically different levels of data sharing by consumers. Our quantitative analysis further illustrates that although data is non-rival and beneficial to social welfare, it can also exacerbate algorithmic inequality.
    JEL: D0 E0
    Date: 2023–05
  28. By: Evzen Kocenda (Institute of Economic Studies, Faculty of Social Sciences, Charles University, Prague; Institute of Information Theory and Automation of the CAS, Prague; CESifo Munich; IOS Regensburg.); Samuel Fiifi Eshun (Institute of Economic Studies, Charles University, Prague, Czech Republic.)
    Abstract: Using a dynamic panel data analysis, we explore the factors influencing financial inclusion in Sub-Saharan Africa (SSA) and countries belonging to the Organization for Economic Co-operation and Development (OECD). We employ the System Generalized Method of Moments (GMM) estimator and assess 31 SSA and 38 OECD countries from 2000-2021. We found that the differences in trade openness, banks' efficiency, income, and remittances are some macro-level factors that explain the variation in financial inclusion levels. We highlight the importance of quality literacy policies, trade improvement with restrictions on cross-border capital flows, and a more efficient financial system to promote financial inclusion.
    Keywords: Financial Inclusion, Financial Inclusion Index, Sub-Saharan Africa (SSA), Organization for Economic Co-operation and Development (OECD), System Generalized Methods of Moments (GMM)
    JEL: C23 E44 F65 G21 O16 O57
    Date: 2023–05
  29. By: Alfarisi, Omar
    Abstract: The cloud service has emerged as one of the 21st-century novel Storage as a Service (SaaS) solutions that eased access to digital storage as needed, with zero maintenance and management efforts on the end users. However, multiple options are currently available with different end-user segments and needs. The service providers would need strategic focus on what segment and feature to target that would be more profitable and attractive to the end users. We analyze the family end-users, compared to corporate and e-commerce, and identified the customer-segment-focused marketing strategy. Although each segment's need differs, the cloud service's capabilities share potential higher value generation to multiple segments. We started by reviewing available strategic marketing analysis techniques to select the best that fits the available data. Finally, we outlined the marketing program and implementation control to deliver growing value to the service provider and end-users.
    Date: 2023–05–08
  30. By: Matthew S. Jaremski; David C. Wheelock
    Abstract: This paper provides quantitative evidence on interbank transmission of financial distress in the Panic of 1907 and ensuing recession. Originating in New York City, the panic led to payment suspensions and emergency currency issuance in many cities. Data on the universe of interbank connections show that i) suspension was more likely in cities whose banks had closer ties to banks at the center of the panic, ii) banks with such links were more likely to close in the panic and recession, and iii) banks responded to the panic by rearranging their correspondent relationships, with implications for network structure.
    JEL: E44 G21 N11 N12
    Date: 2023–05
  31. By: Nicolas Ameye
    Abstract: Essays on the Adoption and Diffusion of Big Data Analytics and Artificial Intelligence TechnologyThe motivation behind this thesis lies around developing the academic literature, on one hand, on the impact of a specific technology on an organization’s strategy, as well as, on the other hand, on the characteristics and components driving and inhibiting the adoption and diffusion of a specific technology inside an organization.By investigating the drivers and challenges of adopting and diffusing Artificial Intelligence (AI) in an organization, this research aims to answer to the following research question: “What are the main complements and antecedents to the adoption and diffusion of Big Data Analytics and Artificial Intelligence technology, at an organizational level?”.To answer that question, we must first understand how the established models of rank, order, stock and epidemic effects influence the adoption of AI technology. Different streams of works have highlighted four main groups of factors affecting the diffusion of new technologies within or across firms: rank, order, stock and epidemic effects. This thesis examines how these factors influence both the adoption and diffusion of Artificial Intelligence technology across and within firms.Second, this thesis extends the established models to incorporate the effects of uncertainty and competitive intensity on the adoption behaviors of AI technologies among firms. We investigate how uncertainty and competitive intensity affect the adoption behaviours of AI technology among firms.Third, this thesis investigates how technological and managerial complementarities influence the adoption and diffusion of AI technology. To this aim, we extend the established models to incorporate effects of technological and managerial complementarities in the adoption and diffusion of Artificial Intelligence technology among firms. We investigate how technological and managerial complementarities help in facilitating inter-firm diffusion, in driving intra-firm diffusion and in reducing the barriers to AI technology adoption.Fourth, this thesis investigates the discrepancies in adoption and use of AI technology between SMEs and large organizations. To this aim, we explore the determinants and patterns of inter- and intra-firm diffusion at both SMEs and large organization levels.A first finding of this thesis highlights the influence of industry-level adoption on a focal firm’s own adoption. This thesis points at the presence of herding behaviors by which firms tend to follow the crowd. As the share of adopters in the industry increases, the crowd gets bigger and provides a more compelling reason to adopt. However, as our results suggest, these herding behaviors are fragile, exacerbated by competitive forces, and counterbalanced by certain sources of uncertainty while strengthened by others. A second finding of this thesis highlights the importance of pre-existing digital capabilities in the adoption of AI technology. The adoption of AI requires a high degree of maturity and a significant stock of complementary digital technology. This is most likely due to the cumulative nature of AI technology that heavily relies on the information and process infrastructure of the firm. But this implies that leapfrogging on the technology is very unlikely with AI, encouraging firms to build the right foundations (in terms of infrastructure, systems, processes and skills) early on.
    Keywords: Technology adoption; Artificial Intelligence
    Date: 2023–05–25
  32. By: Sebastian Infante; Kyungmin Kim; André F. Silva; Robert J. Tetlow
    Abstract: This paper provides an overview of the literature examining how the introduction of a CBDC would affect the banking sector, financial stability, and the implementation and transmission of monetary policy in a developed economy such as the United States. A CBDC has the potential to improve welfare by reducing financial frictions in deposit markets, by boosting financial inclusion, and by improving the transmission of monetary policy. However, a CBDC also entails noteworthy risks, including the possibility of bank disintermediation and associated contraction in bank credit, as well as potential adverse effects on financial stability. A CBDC also raise important questions regarding monetary policy implementation and the footprint of central banks in the financial system. Ultimately, the effects of a CBDC depend critically on its design features, particularly remuneration.
    Keywords: Financial stability; Monetary policy; Banking; Central bank digital currency; Central banking
    JEL: G20 E40 E50
    Date: 2022–11–17
  33. By: Nikolaus Bartzsch (Deutsche Bundesbank); Marco Brandi (Banca d'Italia); Lucas Devigne (Banque de France); Raymond de Pastor (Banque de France); Gianluca Maddaloni (Banca d'Italia); Diana Posada Restrepo (Banco de España); Gabriele Sene (Banca d'Italia)
    Abstract: As part of the Eurosystem’s annual banknote production planning, the national central banks draw up forecasts estimating the volumes of national-issued banknotes in circulation for the three years ahead. As at the end of 2021, more than 80 per cent of euro banknotes in circulation (cumulated net issuance) had been issued by the national central banks of France, Germany, Italy and Spain (‘4 NCBs’). To date, the 4 NCBs have been using ARIMAX models to forecast the banknotes issued nationally in circulation by denomination (‘benchmark models’). This paper presents the structural time series models developed by the 4 NCBs as an additional forecasting tool. The forecast accuracy measures used in this study show that the structural time series models outperform the benchmark models currently in use at each of the 4 NCBs for most of the denominations. However, it should be borne in mind that the statistical informative value of this comparison is limited by the fact the projection period is only twelve months.
    Keywords: euro, demand for banknotes, forecast of banknotes in circulation, structural time series models, ARIMA models, intervention variables
    JEL: C22 E41 E47 E51
    Date: 2023–05
  34. By: Dipankar Das (Assistant Professor, BML Munjal University); Vivek Sharadadevi Jadhav ((Corresponding author), Ph.D. Scholar, Madras School of Economics, Chennai, India)
    Abstract: The primary objective of the paper is to identify the pattern of non-linear pricing in the E-Commerce market and its usage. This paper also investigates whether the post-digitalization tying as a non-linear pricing strategy is an option or a compulsion, through formation of trust. Das and Jadhav (2021) take effort to understand the non-linear pricing in modern e-commerce. This work takes similar effort to analyse the usage of non-linear pricing by e-commerce firms. The researchers have used theoretical model using empirical evidence to find a new pattern of non-linear pricing strategy and its impact on e-commerce market behaviour.
    Keywords: Non-linear Pricing, Trust, Antitrust Law, E-Commerce, Fuzzy preference
    JEL: L11 L41 L81
  35. By: Michelle W. Bowman
    Date: 2023–05–12

General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.