nep-pay New Economics Papers
on Payment Systems and Financial Technology
Issue of 2023‒08‒21
twenty-six papers chosen by

  1. Fair Gatekeeping in Digital Ecosystems By Tirole, Jean; Bisceglia, Michele
  2. Social Media Advertising Effectiveness: The Role of Perceived originality, Liking, Credibility, Irritation, Intrusiveness, and Ad destination By Jean-Éric Pelet; Saïd Aboubaker Ettis
  3. Effects of Explicit Sponsorship Disclosure on User Engagement in Social Media Influencer Marketing By Cao, Zike; Belo, Rodrigo
  4. Asymmetric Platform Oligopoly By Martin Peitz; Susumu Sato
  5. CBDC Policies in Open Economies By Michael Kumhof; Marco Pinchetti; Phurichai Rungcharoenkitkul; Andrej Sokol
  6. Extending Amartya Sen’s Paretian Liberal Paradox to a Firm’s Hierarchy By Massimiliano Vatiero
  7. DeFi liquidations: Volatility and liquidity By Iota Kaousar Nassr; Ana Sasi-Brodesky
  8. How the fiat-backed stablecoins are manipulating US money supply By Nizam, Ahmed Mehedi
  9. Value capture and embeddedness in social-purpose-driven ecosystems. By Asta Pundziene; Neringa Gerulaitiene; Sea Matilda Bez; Irène Georgescu; Christopher Mathieu; Jordi Carrabina-Bordoll; Josep Rialp-Criado; Hannu Nieminen; Alpo Varri; Susanne Boethius; Mark van Gils; Víctor Giménez-Garcia; Isabel Narbón-Perpiñá; Diego Prior-Jiménez; Laura Vilutiene
  10. Cryptoasset Ownership and Use in Canada: An Update for 2022 By Daniela Balutel; Christopher Henry; Doina Rusu
  11. Central Bank Digital Currency Adoption: A Two-Sided Model By Brandon Tan
  12. Bank Competition and Household Privacy in a Digital Payment Monopoly By Mr. Itai Agur; Mr. Anil Ari; Mr. Giovanni Dell'Ariccia
  13. Simulating the Adoption of a Retail CBDC By Leon Rincon, Carlos; Moreno, Jose; Soramaki, Kimmo
  14. Digital sobriety: From awareness of the negative impacts of IT usages to degrowth technology at work By Céline Péréa; Jessica Gérard; Julien de Benedittis
  15. Navigating the Waves of Change: Exploring the Impact of COVID-19 on Consumer Behaviour in Developing Countries By ASUAMAH Yeboah, Samuel
  16. "Zero Cost'' Majority Attacks on Permissionless Blockchains By Joshua S. Gans; Hanna Halaburda
  17. Quantile and expectile copula-based hidden Markov regression models for the analysis of the cryptocurrency market By Beatrice Foroni; Luca Merlo; Lea Petrella
  18. The Role of Digital Accounting And Quality of Accounting Information on Trust in E-Commerce Companies By Mandag, Herny Ria
  19. Retail Investors’ Cryptocurrency Investments By Vesa Pursiainen; Jan Toczynski
  20. Can a Mobile-App-Based Behavioral Intervention Teach Financial Skills to Youth? Experimental Evidence from a Financial Diaries Study By Frisancho, Veronica; Herrera, Alejandro; Prina, Silvia
  21. Is Money Essential? An Experimental Approach By Janet Hua Jiang; Peter Norman; Daniela Puzzello; Bruno Sultanum; Randall Wright
  22. On the Mechanics of NFT Valuation: AI Ethics and Social Media By Zhang, Luyao; Sun, Yutong; Quan, Yutong; Cao, Jiaxun; Tong, Xin
  23. Keep your Enemies Closer: Strategic Platform Adjustments during U.S. and French Elections By Rafael Di Tella; Randy Kotti; Caroline Le Pennec; Vincent Pons
  24. Cross-Supply Chain Collaboration Platform for Pallet Management By Lehner, Roland
  25. The Impact of Shared Telecom Infrastructure on Digital Connectivity and Inclusion By Houngbonon, Georges Vivien; Ivaldi, Marc; Palikot, Emil; Strusani, Davide
  26. Some Lessons from Asian E-Money Schemes for the Adoption of Central Bank Digital Currency By Tao Sun; Ryan Rizaldy

  1. By: Tirole, Jean; Bisceglia, Michele
    Abstract: Do users receive their fair contribution to digital ecosystems? The frequent accusations of excessive platform fees and self-preferencing leveled at dominant gatekeepers raise the issue of the standard gatekeepers should be held to. The paper provides a framework to explain business strategies and assess regulatory proposals. It stresses the key role played by the zero lower bounds on core and app prices in the setting of privately and socially optimal platform fees. Finally, it derives a simple rule for regulating access conditions and analyses its implementation.
    Keywords: Platforms; ecosystems; fair access; price and non-price foreclosure; zero lower bounds
    JEL: L12 L4
    Date: 2023–06–30
  2. By: Jean-Éric Pelet (INSEEC - Institut des hautes études économiques et commerciales | School of Business and Economics); Saïd Aboubaker Ettis (University of Jeddah)
    Abstract: Social media advertising effectiveness is a fundamental issue that remains poorly examined in academic research.The aim of this research is to investigate differences regarding user reactions to advertisements on Facebook. An onlines urvey of Facebook users was conducted to test the hypotheses. Originality, liking, credibility, and irritation have significant effects on consumers'attitudes toward the advertising, which in turn positively influences their purchase intention and recommendation of the brand. Moreover, advertisements driving visitors to the brand's Facebook page are less irritating, more original, credible, and liked than those driving them to the brand'swebsite. Managers could be guided by the results in deciding which features to place at brand posts to enhance their effectiveness. Other managerial and theoretical implications of the findings are identified, and future research directions are suggested.
    Abstract: L'efficacité de la publicité sur les réseaux sociaux est une question fondamentale qui reste peu étudiée dans la recherche académique. L'objectif de cette recherche est d'étudier les différences concernant les réactions des utilisateurs aux publicités sur Facebook. Une enquête en ligne auprès des utilisateurs de Facebook a été menée pour tester les hypothèses. L'originalité, l'appréciation, la crédibilité et l'irritation ont des effets significatifs sur l'attitude des consommateurs envers la publicité, qui à son tour influence positivement leur intention d'achat et leur recommandation de la marque. De plus, les publicités qui dirigent les visiteurs vers la page Facebook de la marque sont moins irritantes, plus originales, crédibles et appréciées que celles qui les dirigent vers le site Internet de la marque. Les responsables pourraient être guidés par les résultats pour décider des fonctionnalités à placer sur les publications de la marque afin d'améliorer leur efficacité. D'autres implications managériales et théoriques des résultats sont identifiées, et de futures directions de recherche sont suggérées.
    Keywords: Ad Destination Advertising Effectiveness Attitude Credibility Intrusiveness Irritation Liking Online Advertising Originality Social Media, Ad Destination, Advertising Effectiveness, Attitude, Credibility, Intrusiveness, Irritation, Liking, Online Advertising, Originality, Social Media
    Date: 2022–05–19
  3. By: Cao, Zike; Belo, Rodrigo
    Abstract: Social media influencer marketing has grown substantially in the last decade and is a major advertising channel for many brands. Social media influencers weave sponsored posts with organic content in their feeds, which raises concerns among regulators and consumer advocates that users may not be able to clearly distinguish between sponsored and organic influencer content. Thus, regulators often mandate the explicit disclosure of sponsored content. However, there is little empirical evidence based on field data about the effects of explicit sponsorship disclosure. Therefore, we empirically investigate the effects of explicitly disclosing sponsorship in influencers' content on users' engagement using a large-scale field dataset collected from Facebook and Instagram. Our empirical results suggest that explicit sponsorship disclosure increases user awareness of the advertising nature and earns users' favorability by enhancing the transparency about the sponsored content. We further design two online experiments to corroborate our empirical results and directly test the underlying mechanisms. Our findings have novel and important implications for marketers, influencers, social media platforms, and regulators in the influencer marketing industry.
    Date: 2023–07–14
  4. By: Martin Peitz; Susumu Sato
    Abstract: We propose a tractable model of asymmetric platform oligopoly in which users from two distinct groups are subject to within-group and cross-group network effects and 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
  5. By: Michael Kumhof (Centre for Macroeconomics (CFM); Centre for Economic Policy Research (CEPR)); Marco Pinchetti (Centre for Macroeconomics (CFM)); Phurichai Rungcharoenkitkul (Bank of Thailand; Bank for International Settlement); Andrej Sokol (Bloomberg; Centre for Macroeconomics (CFM))
    Abstract: We study the consequences for business cycles and welfare of introducing an interest-bearing retail CBDC, competing with bank deposits as medium of exchange, into an estimated 2-country DSGE environment. CBDC issuance of 30% of GDP increases output and welfare by around 6% and 2%, respectively. Financial shocks account for around half of the variance of aggregate demand and inflation, and for the bulk of the variance of financial variables. An aggressive Taylor rule for the interest rate on reserves achieves welfare gains of 0.57% of steady state consumption, an optimized CBDC interest rate rule that responds to a credit gap achieves additional welfare gains of 0.44%, and further gains of 0.57% if accompanied by automatic fiscal stabilizers. A CBDC quantity rule, a response to an inflation gap, a cash-like CBDC, and CBDC as generalized access to reserves, yield significantly smaller gains. CBDC policies can substantially reduce the volatilities of domestic and cross-border banking flows and of the exchange rate. Optimal policy requires a steady state quantity of CBDC of over 40% of annual GDP.
    Keywords: Central bank digital currencies, monetary policy, bank deposits, bank loans, monetary frictions, money demand, money supply, credit creation
    Date: 2023–03
  6. By: Massimiliano Vatiero
    Abstract: Smart contracts (i.e., agreements enforced by a blockchain) are supposed to work at lower transaction costs than traditional (and incomplete) contracts that instead exploit a costly legal enforcement. This paper challenges that claim. I argue that because of the need for adaptation to mutable and unpredictable occurrences (a chief challenge of transaction cost economics à la Oliver Williamson), smart contracts may incur higher transaction costs than traditional contracts. This paper focuses on two problems related to the adaptation: first, smart contracts are constructed to limit and potentially avoid any ex-post legal intervention, including efficiency-enhancing adaptation by courts. Second, the consensus mechanism on which every smart contract depends may lead to additional transaction costs due to a majority-driven adaptation of the blockchain that follows Mancur Olson’s Logic of groups. The paper further proposes several institutional expedients that may reduce these transaction costs of smart contracts.
    Keywords: Paretian liberal paradox, Amartya Sen, A firm’s hierarchy, Transaction costs, Code of business conduct
    JEL: D23 D63 D71 I30 J01
    Date: 2023
  7. By: Iota Kaousar Nassr; Ana Sasi-Brodesky
    Abstract: This work delves into the liquidations mechanism inherent in Decentralised Finance (DeFi) lending protocols and the connection between liquidations and price volatility in decentralised exchanges (DEXs). The analysis employs transactional data of three of the largest DeFi lending protocols and provides evidence of a positive relation between liquidations and post-liquidations price volatility across the main DEX pools. Without directly observing the behaviour of liquidators, these findings indirectly indicate that liquidators require market liquidity to carry out large liquidations and affect market conditions while doing so.
    Keywords: decentralisation, decentralised exchanges, decentralised finance, DeFi, lending protocols, liquidity pools, liquidity providers, tokens
    JEL: G12 G14 G23 O39
    Date: 2023–07–31
  8. By: Nizam, Ahmed Mehedi
    Abstract: Fiat-backed stablecoins have been around for quite some time and yet not much have been said about its impact on US money supply. Although a few studies have qualitatively discussed that the issuance of fiat-backed dollar-pegged stablecoins might have an impact on US money supply, they are unable to quantify it. Here we have developed a detailed framework to quantify the impact of the issuance of fiat-backed US dollar-pegged stablecoins on US money supply. According to the proposed framework, the issuance of US dollar denominated stablecoins is supposed to have a contractionary effect on US money supply. The said contraction stems from the fact that the issuers of stablecoins tend to invest heavily in US treasury bills and bonds, which takes funds out of the process of fractional reserve banking and thereby stops the money multiplication process. Fitting empirical data into our proposed framework, we have shown that the top 3 issuers of stablecoins together have brought about a monetary contraction in US in the range of 1.1-1.2% of total US money supply during different months of 2022.
    Keywords: Cryptocurrencies, stablecoins, money supply
    JEL: E44 E51 E52
    Date: 2023–07–14
  9. By: Asta Pundziene; Neringa Gerulaitiene; Sea Matilda Bez (MRM - Montpellier Research in Management - UM1 - Université Montpellier 1 - UPVM - Université Paul-Valéry - Montpellier 3 - UM2 - Université Montpellier 2 - Sciences et Techniques - UPVD - Université de Perpignan Via Domitia - Groupe Sup de Co Montpellier (GSCM) - Montpellier Business School, Labex Entreprendre - UM - Université de Montpellier, UM - Université de Montpellier); Irène Georgescu; Christopher Mathieu; Jordi Carrabina-Bordoll; Josep Rialp-Criado; Hannu Nieminen; Alpo Varri; Susanne Boethius; Mark van Gils; Víctor Giménez-Garcia; Isabel Narbón-Perpiñá; Diego Prior-Jiménez; Laura Vilutiene
    Abstract: We aim to answer the question of the effect of a social-purpose-driven ecosystem on value capture from digital health platforms. We call the social-purpose-driven ecosystem a phenomenon which seeks social impact before profits and aims to empower citizens for individual and collective well-being. Thus, capturing value from digital platforms embedded in a social-purpose-driven ecosystem fundamentally differs from profiting from purely commercial digital platforms and poses significant challenges to platform owners and public policy. Previous research has focused mainly on profiting from technological innovations but has yet to consider the contextual role of the social-purpose-driven ecosystem. We applied the Profiting from Innovation (PFI) framework to fill this gap. Furthermore, based on the results of the multiple-case study of five European digital healthcare platforms, we extend the PFI framework. As a result, we define four unique contingencies which enable value capture from digital healthcare platforms embedded in a social-purpose-driven ecosystem: 1) multilayer value creation, (2) multipurpose complementary assets, (3) emerging dominant design, and (4) distributed socioeconomic returns mechanisms. The study offers two managerial and policy contributions. First, it calls on platform owners and policymakers to acknowledge the contextual effect of a social-purpose-driven ecosystem. Second, multilayer value creation, multiple complementary assets, dominant design and distributed socioeconomic returns mechanisms can positively affect capturing value from digital healthcare platforms.
    Keywords: Embeddedness, Digital healthcare platform, Social-purpose-driven, ecosystem, Value capture, Multiple-case study, Profiting from innovations
    Date: 2023–06
  10. By: Daniela Balutel; Christopher Henry; Doina Rusu
    Abstract: This paper provides an update on cryptoasset ownership in Canada using data from two Bank of Canada surveys conducted in 2022. We find that Bitcoin ownership declined from 13% in 2021 to 10% in 2022, and ownership of other cryptoassets also fell. These drops occurred against a background of steep price declines and an increasingly tight regulatory atmosphere for cryptoassets.
    Keywords: Bank notes; Digital currencies and fintech; Econometric and statistical methods
    JEL: E4 C81 O51
    Date: 2023–07
  11. By: Brandon Tan
    Abstract: For central bank digital currencies (CBDCs) to accomplish their intended objectives, it is necessary for both consumers to use them and for merchants to accept them. This paper develops a dynamic two-sided payments model with both heterogeneous households and merchants/firms to study: (1) The adoption of CBDC by households and firms, and (2) The impact of CBDC issuance on financial inclusion, informality, and disintermediation. Our model shows that there is a feedback loop where more households will adopt CBDC if more firms accept CBDC and vice versa -- incentivizing both households and firms will result in greater levels of take-up. Households are more likely to adopt CBDC if it is low cost, provides an attractive savings vehicle, reduces the cost of remittances, improves the efficiency of government payments, and (if accepted by merchants) offers a valuable means of payment. Firms are more likely to accept CBDC if fees are low, if there are tax exemptions or subsidies for transactions made in CBDC, and if households who prefer to make payments with CBDC make up a large share of revenue. Upon CBDC issuance, an economy can get stuck at a steady state with low CBDC adoption and small welfare gains if the features of CBDC which do not rely on merchant acceptance (remuneration, efficiency of cross border and government payments) are not sufficiently attractive, or if the households benefiting from these features make up a small share of merchant revenue. Temporary subsidies and using CBDC for government payments can spur initial take-up to transition an economy to a welfare improving steady state with high(er) CBDC usage. Greater adoption of CBDC will result in greater financial inclusion and formalization, but potentially the disintermediation of banks and card payments. Thus, there is a trade-off in designing CBDC for greater adoption. However, the gains are more likely to outweigh the risks in lower income economies with larger unbanked populations and informal sectors.
    Keywords: Central bank digital currency; financial inclusion; informality; digital money; disintermediation; two-sided market; adoption; payments
    Date: 2023–06–16
  12. By: Mr. Itai Agur; Mr. Anil Ari; Mr. Giovanni Dell'Ariccia
    Abstract: Lenders can exploit households' payment data to infer their creditworthiness. When households value privacy, they then face a tradeoff between protecting such privacy and credit conditions. We study how the introduction of an informationally more intrusive digital payment vehicle affects households' cash use, credit access, and welfare. A tech monopolist controls the intrusiveness of the new payment method and manipulates information asymmetries among households and oligopolistic banks to extract data contracts that are more lucrative than lending on its own. The laissez-faire equilibrium entails a digital payment vehicle that is more intrusive than socially optimal, providing a rationale for regulation.
    Keywords: Privacy; Financial intermediation; Big Tech; Data regulation; data contract; payment vehicle; DC issuer; tech monopolist; bank competition; monopolist digital currency issuer; Credit; Digital financial services; Loans; Consumer credit; Data collection
    Date: 2023–06–09
  13. By: Leon Rincon, Carlos (Tilburg University, Center For Economic Research); Moreno, Jose; Soramaki, Kimmo
    Keywords: payments; money; agent-based modelling; simulation; digital twin
    Date: 2023
  14. By: Céline Péréa (CERAG - Centre d'études et de recherches appliquées à la gestion - UGA - Université Grenoble Alpes); Jessica Gérard (CERAG - Centre d'études et de recherches appliquées à la gestion - UGA - Université Grenoble Alpes); Julien de Benedittis (Mines Saint-Étienne MSE - École des Mines de Saint-Étienne - IMT - Institut Mines-Télécom [Paris], COACTIS - COnception de l'ACTIon en Situation - UL2 - Université Lumière - Lyon 2 - UJM - Université Jean Monnet - Saint-Étienne, FAYOL-ENSMSE - Institut Henri Fayol - Mines Saint-Étienne MSE - École des Mines de Saint-Étienne - IMT - Institut Mines-Télécom [Paris], FAYOL-ENSMSE - Département Management responsable et innovation - ENSM ST-ETIENNE - Ecole Nationale Supérieure des Mines de St Etienne - Institut Henri Fayol)
    Abstract: The rise of digital technologies has led to growing concern over their environmental impact, prompting the emergence of the phenomenon of digital sobriety. Rooted in the principles of degrowth technology, digital sobriety advocates for reduced technology usage to create a more sustainable society. However, it contrasts with typical frameworks that promote the continued use of IT. Furthermore, it runs counter to the prevailing trend of digital transformation within organisations, which is expected to expand in the future. As a result, it challenges conventional approaches to IT usage and the associated contextual factors. The purpose of this paper is to investigate the concept of digital sobriety, examining its relationship to conventional approaches as well as the degrowth technology perspective. The study explores how digital sobriety is implemented within organisations and how it is perceived by IT users. Thirty-three participants from IT companies were included and the scope and characteristics of the phenomenon of digital sobriety were identified, including five levels of IT user maturity: refutation, inaction, substitution, optimisation, and disadoption/degrowth. The results highlight the need to balance the internal and external factors of digital sobriety and identify different trajectories of digital sobriety as socio-technical imaginaries for the future of IT.
    Keywords: Digital carbon footprint, Digital sobriety, Degrowth technology, IT uses, Green IT, Socio-technical imaginaries
    Date: 2023–09
  15. By: ASUAMAH Yeboah, Samuel
    Abstract: This systematic review examines the changes in consumer behaviour patterns during the COVID-19 pandemic in developing countries. The review investigates the impact of the pandemic on purchasing patterns, the shift towards online shopping, altered preferences for essential goods and services, changes in brand loyalty, and the implications for businesses and policymakers. The review follows a structured methodology, including literature search, study selection, data extraction, synthesis, quality assessment, and data interpretation. The findings reveal significant shifts in consumer behaviour across developing countries, such as reduced spending on non-essential goods, increased reliance on online shopping platforms, preferences for local and domestic products, and challenges to brand loyalty. The implications for businesses include the need to adapt strategies to meet changing consumer needs, while policymakers should consider implementing policy interventions to support businesses and promote digital literacy. This systematic review provides valuable insights for decision-making and strategic planning in the post-pandemic period, offering guidance for businesses and policymakers in developing countries worldwide.
    Keywords: Consumer behaviour, COVID-19, Developing countries, purchasing patterns, online shopping, essential goods, brand loyalty, implications, businesses, policymakers.
    JEL: D12 D83 L81 O33
    Date: 2023–07–05
  16. By: Joshua S. Gans; Hanna Halaburda
    Abstract: Permissionless blockchains were constructed with a view to being sustainably secure. At the heart of blockchain consensus mechanisms was an explicit cost (whether it be work or stake) for participation in the network and the opportunity to propose blocks that would be added to the blockchain. A key rationale for that cost was to make attacks on the network, which could be theoretically carried out if a majority of nodes were controlled by a single entity, too expensive to be worthwhile. Here we demonstrate that a majority attacker can successfully attack with a negative cost, which shows that explicit participation requirements do not necessarily result in a sustainably secure network. This suggests that any benefits of an attack that drive sustainable security are regulated from outside the network itself.
    JEL: D42 D82 E42
    Date: 2023–07
  17. By: Beatrice Foroni; Luca Merlo; Lea Petrella
    Abstract: The role of cryptocurrencies within the financial systems has been expanding rapidly in recent years among investors and institutions. It is therefore crucial to investigate the phenomena and develop statistical methods able to capture their interrelationships, the links with other global systems, and, at the same time, the serial heterogeneity. For these reasons, this paper introduces hidden Markov regression models for jointly estimating quantiles and expectiles of cryptocurrency returns using regime-switching copulas. The proposed approach allows us to focus on extreme returns and describe their temporal evolution by introducing time-dependent coefficients evolving according to a latent Markov chain. Moreover to model their time-varying dependence structure, we consider elliptical copula functions defined by state-specific parameters. Maximum likelihood estimates are obtained via an Expectation-Maximization algorithm. The empirical analysis investigates the relationship between daily returns of five cryptocurrencies and major world market indices.
    Date: 2023–07
  18. By: Mandag, Herny Ria
    Abstract: The purpose of this study is to find out the comparison of Digital accounting and Quality of accounting Information in E-Commerce companies to trust. the research methodology used by researchers is a qualitative method of description. the data from this study were taken from journaling literacy, other article references, US well US the direct web from the e-commerce company. Of the many e-commerce that exists, the researchers took one of the e-commerce companies from 2 countries, namely Amazone in the US, united States and Tokopedia in Indonesia. each process carried out is related to the quality of the information, which can identify the advantages and drawbacks of each information provided to the two e-commerce companies. From the findings of the researchers revealed that a comparison of e-commerce companies with Tokopedia states that is superior to Tokopedia in terms of business scales, technology and products.
    Date: 2023–07–01
  19. By: Vesa Pursiainen (University of St. Gallen; Swiss Finance Institute); Jan Toczynski (University of Zurich; Swiss Finance Institute)
    Abstract: We use transaction data gathered by a large fintech firm to study retail investors’ investments in cryptocurrencies. Crypto investors tend to be young, male, high-income, and live in wealthy urban areas with high levels of self-employment and low levels of altruism. Crypto investments are positively associated with stock investments and the use of robo-investing apps, as well as with gambling and the use of round numbers. Net flows into cryptocurrencies are negatively correlated with short-term past returns but positively with longer-term ones. Historical high and low price points also seem to matter. Personal initial experiences of crypto returns at adoption affect subsequent crypto investments. Investors exhibit little market timing ability, but controlling for the time of entry, women do better and stock investors worse.
    Keywords: cryptocurrency, retail investors, fintech, market timing
    JEL: G11 G23 G51
    Date: 2023–06
  20. By: Frisancho, Veronica (Inter-American Development Bank); Herrera, Alejandro (Instituto de Estudios Avanzados en Desarrollo (INESAD)); Prina, Silvia (Northeastern University)
    Abstract: We study the impact of a mobile-app-based behavioral intervention on youth's financial literacy and financial behavior. To maximize the chances to reach out-of-school youth, we provided access to a user-friendly budget recording tool coupled with biweekly enumerators' visits and SMSs during a 27-week period. The bundled treatment has positive and significant effects on financial literacy and awareness of market prices. The probability of saving and savings deposits are not affected, but usage of credit increases both at the extensive and intensive margins. Average treatment effects on financial literacy and behavior are driven by youth without previous exposure to financial education, suggesting that the bundled intervention prompted specific subgroups (i.e., youth with lower levels of financial knowledge) to invest more in financial literacy.
    Keywords: financial inclusion, financial diaries, financial literacy, youth
    JEL: C93 D90 G41 G53 O12 O16
    Date: 2023–07
  21. By: Janet Hua Jiang; Peter Norman; Daniela Puzzello; Bruno Sultanum; Randall Wright
    Abstract: Monetary exchange is deemed essential when better incentive-compatible outcomes can be achieved with money than without it. We study essentiality both theoretically and experimentally, using finite-horizon monetary models that are naturally suited to the lab. We also follow the mechanism design approach and study the effects of strategy recommendations, both when they are incentive-compatible and when they are not. Results show that output and welfare are significantly enhanced by fiat currency when monetary equilibrium exists. Also, recommendations help if they are incentive-compatible but not much otherwise. Sometimes money is used when it should not be and we investigate why, using surveys and measures of social preferences.
    Keywords: Central bank research; Economic models
    JEL: E4 E5 C92
    Date: 2023–07
  22. By: Zhang, Luyao; Sun, Yutong; Quan, Yutong; Cao, Jiaxun; Tong, Xin
    Abstract: As CryptoPunks pioneers the innovation of non-fungible tokens (NFTs) in AI and art, the valuation mechanics of NFTs has become a trending topic. Earlier research identifies the impact of ethics and society on the price prediction of CryptoPunks. Since the booming year of the NFT market in 2021, the discussion of CryptoPunks has propagated on social media. Still, existing literature hasn't considered the social sentiment factors after the historical turning point on NFT valuation. In this paper, we study how sentiments in social media, together with gender and skin tone, contribute to NFT valuations by an empirical analysis of social media, blockchain, and crypto exchange data. We evidence social sentiments as a significant contributor to the price prediction of CryptoPunks. Furthermore, we document structure changes in the valuation mechanics before and after 2021. Although people's attitudes towards Cryptopunks are primarily positive, our findings reflect imbalances in transaction activities and pricing based on gender and skin tone. Our result is consistent and robust, controlling for the rarity of an NFT based on the set of human-readable attributes, including gender and skin tone. Our research contributes to the interdisciplinary study at the intersection of AI, Ethics, and Society, focusing on the ecosystem of decentralized AI or blockchain. We provide our data and code for replicability as open access on GitHub.
    Date: 2023–07–14
  23. By: Rafael Di Tella; Randy Kotti; Caroline Le Pennec; Vincent Pons
    Abstract: A key tenet of representative democracy is that politicians' discourse and policies should follow voters' preferences. In the median voter theorem, this outcome emerges as candidates strategically adjust their platform to get closer to their opponent. Despite its importance in political economy, we lack direct tests of this mechanism. In this paper, we show that candidates converge to each other both in ideology and rhetorical complexity. We build a novel dataset including the content of 9, 000 primary and general election websites of candidates for the U.S. House of Representatives, 2002-2016, as well as 57, 000 campaign manifestos issued by candidates running in the first and second round of French parliamentary and local elections, 1958-2022. We first show that candidates tend to converge to the center of the ideology and complexity scales and to diversify the set of topics they cover, between the first and second round, reflecting the broadening of their electorate. Second, we exploit cases in which the identity of candidates qualified for the second round is quasi-random, by focusing on elections in which they narrowly win their primary (in the U.S.) or narrowly qualify for the runoff (in France). Using a regression discontinuity design, we find that second-round candidates converge to the platform of their actual opponent, as compared to the platform of the runner-up who did not qualify for the last round. We conclude that politicians behave strategically and that the convergence mechanism underlying the median voter theorem is powerful.
    JEL: D72 P0
    Date: 2023–07
  24. By: Lehner, Roland
    Abstract: Standardized pallets are an important factor in today's logistics sector to enable efficient processes in transport, storage and handling. By using an open exchange pool for pallets, additional opportunities arise for horizontal and vertical collaboration of various actors from different supply chains. The dissertation "Cross-Supply Chain Collaboration Platform for Pallet Management" investigates the potential of a digital platform for such cross-actor collaboration in pallet management. The designed platform has special mechanisms for balancing pallet debts that arise in the network and for joint planning of empty pallet flows. Therefore, the impact of the designed platforms on logistic processes, especially transports, is explored using simulation modeling. Furthermore, blockchain technology is investigated, which could be used for the implementation of the platform concept and could generate trust in a network of unknown actors. In this context, an empirical online-experiment is used to analyze in a differentiated way which specific features of the blockchain technology generate trust in technology and how these features interact with each other.
    Date: 2023
  25. By: Houngbonon, Georges Vivien; Ivaldi, Marc; Palikot, Emil; Strusani, Davide
    Abstract: A substantial number of individuals remains unconnected to the Internet despite an increasing emphasis on infrastructure-based competition. This paper investigates the impact of shared telecom infrastructure on digital connectivity and inclusion using a new dataset on mobile tower sharing transactions between 2008 and 2020, i.e., acquisitions of towers by independent companies from mobile network operators to be rented back to all operators. Estimates based on difference-in-differences with different timing of treatment suggest that these transactions resulted in a significant drop in the price of mobile connectivity as well as an increase in availability and uptake of mobile Internet, especially by rural households and women. Our findings suggest that increased competition intensity through reduced market concentration appears to be the main driver of these outcomes.
    Keywords: Mobile Telecommunications; Vertical Integration; Digital Technology Adoption
    JEL: L96 L14 O14
    Date: 2023–04
  26. By: Tao Sun; Ryan Rizaldy
    Abstract: This paper synthesizes four lessons from the experiences of six Asian e-money schemes for central banks as they consider adopting central bank digital currency (CBDC): (i) CBDC should embody four attributes: trust, convenience, efficiency, and security; (ii) CBDC service providers can facilitate CBDC adoption through four channels: leveraging digital technology, targeting use cases, developing business models, and complying with legal and regulatory requirements; (iii) central banks could incentivize CBDC service providers to develop these four channels when considering CBDC adoption; and (iv) central banks may be able to establish data-sharing arrangements that preserve privacy while leaving room for CBDC service providers to explore the economic value of data.
    Keywords: E-money; central bank digital currency; service providers; e-money adoption; e-money scheme; e-money ecosystem; e-money development; e-money PSP; e-money transaction; Digital currencies; Central Bank digital currencies; Digital financial services; Social networks; Asia and Pacific; Southeast Asia
    Date: 2023–06–09

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