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on Payment Systems and Financial Technology |
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Issue of 2022‒10‒31
37 papers chosen by |
| By: | Jonathan Chiu (Bank of Canada); Thorsten V. Koeppl |
| Abstract: | Why do BigTech platforms introduce payment services? Digital platforms often run business models where activities on the platform generate data that can be monetized off the platform. There is a trade-o between the value of such data and the privacy concerns of users, since platforms need to compensate users for their privacy loss by subsidizing activities. The nature of complementarities between data and payments determines the introduction of payments. When data help to provide better payments (data-driven payments), platforms have too little incentives to adopt. When payments generate additional data (payments-driven data), platforms may adopt payments inefficiently. |
| Keywords: | BigTech, Payments, Privacy, Digital Platform, Data |
| JEL: | D8 E42 L1 |
| Date: | 2022–05 |
| URL: | http://d.repec.org/n?u=RePEc:qed:wpaper:1490&r= |
| By: | Sriram Darbha |
| Abstract: | A variety of technology designs could support retail central bank digital currency (CBDC) systems. We develop five archetypes of CBDC systems, outline their characteristics and discuss their trade-offs. This work serves as a framework to analyze and compare different designs, independent of vendor, platform and implementation. |
| Keywords: | Central bank research; Digital currencies and fintech |
| JEL: | E E4 E42 E5 E51 O O3 |
| Date: | 2022–10 |
| URL: | http://d.repec.org/n?u=RePEc:bca:bocsan:22-14&r= |
| By: | Daniela Balutel; Walter Engert; Christopher Henry; Kim Huynh; Marcel Voia |
| Abstract: | This report studies the dynamics of Bitcoin awareness and ownership from 2016 to 2021, using the Bank of Canada’s Bitcoin Omnibus Surveys (BTCOS). In 2021, Canadians’ awareness of Bitcoin remained stable at about 90%, while ownership increased to 13% from the 5% observed in 2018-2020. Canadian Bitcoin owners in 2021 were more likely to be male, aged 18 to 34 years old, with a university degree or high income. They largely see Bitcoin as an investment. A new question added to the 2021 BTCOS helps us understand the influx of investors to the Bitcoin market. Responses to this question show that roughly half of current Bitcoin owners invested during the COVID-19 pandemic (2020-2021). These recent owners differ in several ways from long-term owners. Finally, we document the broader economic context of the increase in Bitcoin ownership: widespread increases in savings and wealth by Canadian households during the pandemic, coupled with financial technology (Fintech) companies providing accessible and user-friendly platforms for buying Bitcoin. |
| Keywords: | Bank notes; Digital currencies and fintech; Econometric and statistical methods |
| JEL: | E4 C12 O51 |
| Date: | 2022–10 |
| URL: | http://d.repec.org/n?u=RePEc:bca:bocawp:22-44&r= |
| By: | Zefeng Chen; Zhengyang Jiang |
| Abstract: | Do digital payment technologies generate liquidity premia like cash and Treasury? We provide an estimate in the context of the world’s largest digital payment platform, Alipay. Our empirical strategy exploits the variation in the timing of the introduction of money market funds that users on this platform can hold and use for digital transactions. We find that, once a fund becomes eligible for these transactions, its size increases by 45 times on average. Through the lens of a demand system that models funds as imperfect substitutes, this size increase maps to a liquidity premium of about 0.8% per annum. |
| Keywords: | digital payment, liquidity premium, money market fund |
| JEL: | E41 G12 |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_9933&r= |
| By: | Zamora-Pérez, Alejandro; Coschignano, Eliana; Barreiro, Lorena |
| Abstract: | Central banks have been discussing the introduction of a retail central bank digital currency (rCBDC) for some time. However, potential obstacles to its adoption by consumers and retailers remain largely unexplored in the academic and policy literature. This paper surveys the key elements involved in the adoption of any new means of payment and discusses failed and ongoing initiatives with public digital money. It concludes that ensuring the desired level of adoption of rCBDCs may impose significant constraints on central bank design choices and policy goals. In fact, in some settings, central banks may find themselves on the horns of a dilemma in seeking to balance the needs to (i) preserve the central bank’s hierarchy of policy goals, (ii) increase the chances of adoption and use of rCBDCs by consumers and retailers, and (iii) avoid any adverse economic effects. JEL Classification: E42, E58, D12 |
| Keywords: | central bank digital currency, demand for money, means of payment |
| Date: | 2022–10 |
| URL: | http://d.repec.org/n?u=RePEc:ecb:ecbops:2022307&r= |
| By: | World Bank |
| Keywords: | Finance and Financial Sector Development - Access to Finance Finance and Financial Sector Development - Finance and Development Finance and Financial Sector Development - Financial Sector and Social Assistance Health, Nutrition and Population - Disease Control & Prevention |
| Date: | 2020–12 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wboper:35001&r= |
| By: | Christos Genakos; Tobias Kretschmer; Ambre Nicolle |
| Abstract: | Confusing consumers can be profitable for companies, particularly in a highly competitive market. Christos Genakos, Tobias Kretschmer and Ambre Nicolle find evidence that, for a period, phone operators decreased the transparency of their mobile plans, creating confusion among users and, at the same time, pushing up prices. |
| Keywords: | competitive strategy, obfuscation, mobile telecommunications industry |
| Date: | 2022–06–21 |
| URL: | http://d.repec.org/n?u=RePEc:cep:cepcnp:634&r= |
| By: | Lanfei Shi (McIntire School of Commerce, University of Virginia, Charlottesville, Virginia, United States 22903); Raveesh Mayya (Leonard N. Stern School of Business, New York University, New York, New York, United States 10012); Shun Ye (School of Business, George Mason University, Fairfax, Virginia, United States 22030) |
| Abstract: | With the rise of international e-commerce, geolocation boundaries seem to have become blurred and less relevant. Yet, emerging evidence has shown that consumers tend to exhibit location preferences in choosing sellers (e.g., U.S. consumers may prefer products made domestically). While the important role of salient information signals such as price and product ratings has been recognized, our study seeks to examine a less investigated information signal—the seller’s location. We ask whether and how the disclosure of seller location affects the product sales and pricing strategies of international sellers as compared to domestic sellers. We identify such effects by leveraging an exogenous policy change on Amazon that mandated all sellers to disclose their business locations. We further exploit the difference between the announcement of the policy change and its actual implementation to examine potential forward-looking responses from sellers upon the policy announcement. Our analyses reveal that, upon public announcement of the policy, international sellers proactively adjust their pricing strategies ahead of the policy implementation, leading to sales improvement. However, we observe a sales reversal effect upon the policy implementation—disclosing seller location not only cancels the gain from aggressive pricing for international sellers but also exacerbates their sales gap from their domestic counterparts. Such a home bias, which we find to be behavioral bias, creates a competitive disadvantage for international sellers, leading to a location divide on the global platform that may stifle cross-side network effects on the platform. Our findings shed light on the unintended consequences of information disclosure and provide valuable implications for managing global e-commerce platforms. |
| Keywords: | seller location disclosure; policy change; home bias; e-commerce; digital platforms; information signals; unintended consequence |
| JEL: | L14 L43 D82 |
| Date: | 2022–09 |
| URL: | http://d.repec.org/n?u=RePEc:net:wpaper:2202&r= |
| By: | Federico S. Mandelman; Victoria Nuguer; Alan Finkelstein Shapiro |
| Abstract: | We build a model with a traditional banking system, endogenous entry of firms and fintech intermediaries, and firm heterogeneity in credit access and usage to study the credit-market, macroeconomic, and business cycle implications of the recent sizable growth in the number of fintech intermediaries in emerging economies. Our analysis delivers three findings. First, the impact of greater fintech entry on firm financial inclusion depends on whether greater entry is driven by lower entry costs for fintech intermediaries or lower barriers to fintech credit for unbanked firms. Second, greater fintech entry can have positive long-term macroeconomic effects. Third, greater fintech entry leads to a reduction in output volatility but results in greater relative volatility in bank credit and consumption. The effects of fintech entry on macro outcomes and volatility hinge critically on the interaction between domestic financial shocks and the reduction in fintech lending rates stemming from greater fintech entry. Unless greater fintech entry leads to lower fintech credit costs for firms, greater fintech entry will have no meaningful credit-market or business-cycle consequences. |
| Keywords: | financial access and participation; endogenous firm entry; banking sector; fintech entry; emerging economy business cycles |
| JEL: | E24 E32 E44 F41 G21 |
| Date: | 2022–01–31 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedawp:94782&r= |
| By: | Ibrahim Halil Efendioglu; Yakup Durmaz |
| Abstract: | The aim of this paper is to examine how consumer perceptions of social media advertisements affect advertising value and brand awareness. With a rapid increase in the number of social media users over the last ten years, a new advertising domain has become available for companies. Brands that manage social media well in their advertising strategies can quickly influence consumer decision-making and create awareness. However, in social media advertising, which is different from traditional advertising, creating content should be produced and this content should be perceived in a short time by consumers. To achieve this, it is necessary to build rapport with consumers and to present correctly what they wish to see in advertisements by creating awareness. In view of the increasing importance of social media advertising, the study examines how consumer perceptions of Instagram advertisements affect advertising value and brand awareness. This study was conducted with Generation Y consumers on the basis of their Instagram habits, a popular social media app. For this purpose, surveys were held with 665 participants who use Instagram. The collected data were analyzed using structural equation modeling. According to the analysis results, Y generations perceptions of Instagram advertisements have both a positive and negative impact on advertising value and brand awareness and brand associations. |
| Date: | 2022–09 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2209.13596&r= |
| By: | Bernhard K Meister; Henry CW Price |
| Abstract: | On the blockchain, NFT games have risen in popularity, spawning new types of digital assets. We present a simplified version of well-known NFT games, followed by a discussion of issues influencing the structure and stability of generic games. Where applicable, ideas from quantitative finance are incorporated, suggesting various design constraints. Following that, we explain three distinct methods for extracting value from NFT games. The first is to utilise NFT tokens as collateral outside of the game's walled garden; the second is to construct mutual beneficial games based on the participants' risk tolerance, and the third is to use Siegel's paradox in the case of multiple numeraires. |
| Date: | 2022–09 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2209.09956&r= |
| By: | Krishna Dasaratha; Kevin He |
| Abstract: | We study learning on social media with an equilibrium model of users interacting with shared news stories. Rational users arrive sequentially and each observes an original story (i.e., a private signal) and a sample of predecessors' stories in a news feed, then decides which stories to share. The observed sample of stories depends on what predecessors share as well as the sampling algorithm, which represents a design choice of the platform. We focus on how much the algorithm relies on virality (how many times a story has been previously shared) when generating news feeds. Showing users more viral stories can increase information aggregation, but it can also generate steady states where most shared stories are wrong. Such misleading steady states self-perpetuate, as users who observe these wrong stories develop wrong beliefs, and thus rationally continue to share them. We find that these bad steady states appear discontinuously, and even a benevolent platform designer either accepts these misleading steady states or induces fragile learning outcomes in the optimal design. |
| Date: | 2022–10 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2210.01267&r= |
| By: | Luca Sandrini (Research Center of Quantitative Social and Management Sciences, Faculty of Economics and Social Sciences, Budapest University of Technology and Economics, Műegyetem rkp. 3., H-1111 Budapest, Hungary.); Robert Somogyi (Budapest University of Technology and Economics, and Centre for Economic and Regional Studies, Műegyetem rkp. 3., H-1111 Budapest, Hungary.) |
| Abstract: | In this paper, we build a model of the news market where advertisers choose to allocate their ads between a social media platform and a news website that is the content creator. Our main objective is to evaluate a policy intervention that aims to foster news creation by transferring revenues from social media to news websites. Such interventions, commonly referred to as news media bargaining codes were first introduced in Australia in 2021 and are being implemented worldwide. We build on a novel trade-off between the higher advertising efficiency of social media and the value of content creation by news websites. When news quality is unaffected by the policy, we find that the equilibrium level of news creation may be socially sub-optimal. Moreover, we show that the policy intervention mandated by the bargaining code is always welfare-increasing. When news quality is endogenous, we nuance our results by showing that a poorly designed transfer can be inefficient. However, it still holds that the policy never harms consumers. Finally, we also provide some guidance on how to design the policy. |
| Keywords: | social media; news website; bargaining code; platform regulation |
| JEL: | D43 L13 L51 L82 |
| Date: | 2022–09 |
| URL: | http://d.repec.org/n?u=RePEc:net:wpaper:2206&r= |
| By: | Matheus V. X. Ferreira; David C. Parkes |
| Abstract: | Trading on decentralized exchanges has been one of the primary use cases for permissionless blockchains with daily trading volume exceeding billions of U.S.~dollars. In the status quo, users broadcast transactions and miners are responsible for composing a block of transactions and picking an execution ordering -- the order in which transactions execute in the exchange. Due to the lack of a regulatory framework, it is common to observe miners exploiting their privileged position by front-running transactions and obtaining risk-fee profits. In this work, we propose to modify the interaction between miners and users and initiate the study of {\em verifiable sequencing rules}. As in the status quo, miners can determine the content of a block; however, they commit to respecting a sequencing rule that constrains the execution ordering and is verifiable (there is a polynomial time algorithm that can verify if the execution ordering satisfies such constraints). Thus in the event a miner deviates from the sequencing rule, anyone can generate a proof of non-compliance. We ask if there are sequencing rules that limit price manipulation from miners in a two-token liquidity pool exchange. Our first result is an impossibility theorem: for any sequencing rule, there is an instance of user transactions where the miner can obtain non-zero risk-free profits. In light of this impossibility result, our main result is a verifiable sequencing rule that provides execution price guarantees for users. In particular, for any user transaction $A$, it ensures that either (1) the execution price of $A$ is at least as good as if $A$ was the only transaction in the block, or (2) the execution price of $A$ is worse than this ``standalone'' price and the miner does not gain (or lose) when including $A$ in the block. |
| Date: | 2022–09 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2209.15569&r= |
| By: | Yufeng Huang (Simon Business School, University of Rochester, Rochester, NY 14627); Bowen Luo (D’Amore-McKim School of Business, Northeastern University, Boston, MA 02115); Chenyu Yang (3115E Tydings Hall, 7343 Preinkert Dr., University of Maryland, College Park, MD 20742) |
| Abstract: | Non-fungible Tokens (NFT) have emerged as a popular monetization mechanism for digital artists. We study the NFT market on foundation.app, an NFT platform. We document significant heterogeneity of seller behaviors. 6.4% of sellers transfer out their proceeds to a crypto exchange, but they account for 26.4% of all artwork sales. We also find demand is not correlated with ether prices, but ether prices affect the listing prices set by sellers that do not transfer out proceeds. We conjecture that sellers that rely on NFT sales for income are better informed of the demand. We study the implications of the ether price volatility for market efficiency. |
| Keywords: | NFT, crypto price volatility, market efficiency |
| JEL: | D4 P4 |
| Date: | 2022–10 |
| URL: | http://d.repec.org/n?u=RePEc:net:wpaper:2207&r= |
| By: | Ilkin Huseynov (Central Bank of the Republic of Azerbaijan); Nazrin Ramazanova (Central Bank of the Republic of Azerbaijan); Hikmat Valirzayev (Central Bank of the Republic of Azerbaijan) |
| Abstract: | This study examines whether payment system data can be useful for tracking economic activity in Azerbaijan. We utilise the transactional payment system data at the sectoral level and employ a Dynamic Factor Model (DFM) and Machine Learning (ML) techniques to nowcast quarterover- quarter and year-over-year nominal gross domestic product. We compared the nowcasting performance of these models against the benchmark model in terms of the out-of-sample root mean square error at three different horizons during the quarter. The results suggest that ML and DFM models have higher predictability than the benchmark model and can significantly lower nowcast errors. Although our payment time series is still too short to obtain statistically robust results, the findings indicate that variables at a higher frequency in such data can be helpful in assessing the current state of the economy and have the potential to provide a faster estimate of the economic activity. |
| Keywords: | Payment data, Nowcasting, ML, DFM |
| JEL: | C32 C38 C52 C53 E42 |
| Date: | 2022–10–12 |
| URL: | http://d.repec.org/n?u=RePEc:gii:giihei:heidwp23-2022&r= |
| By: | Valeria Stefanelli; Francesco Manta; Pierluigi Toma |
| Abstract: | Digitalization in many economic sectors drove the financial system to adapt to new paradigms of technological transformation. Moreover, the extant regulatory framework forced the financial system to reconsider its business models and its relationship with the market. Such reasons generated also in the banking sector a new model of competition within the ecosystem never seen before in this sector. The new ecosystem of banks and financial institutions lacks a common framework that not only synthesizes the development lines of open innovation in the banking sector, but also regarding the planification of strategic choices and organisation within the new ecosystems. The present study aims to inquire the strategic positioning of European banks toward their digital transformation strategies, by analysing the decision-making processes that occurred between 2015 and 2019. A qualitative analysis on partnerships and the adoption of Application Programming Interfaces (APIs) development in support of new service models was carried out. Results have relevant policy implications for regulators, linked to the business evolution and the risks of outsourcing, and managerial implications for the followers, specifically on the plan of service integration to diversify and boost their activities in the segment of customer relationship management and care, providing a better user experience. |
| Date: | 2022–10 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2210.01109&r= |
| By: | Donati,Dante; Orozco Olvera,Victor Hugo; Rao,Nandan Mark |
| Abstract: | This paper experimentally tests the effectiveness of two short edutainment campaigns (under 25minutes) delivered through Facebook Messenger at reshaping gender norms and reducing social acceptability of violenceagainst women in India. Participants were randomly assigned to watch video clips with implicit or explicit messagingformats (respectively a humorous fake reality television drama or a docuseries with clear calls to action). After oneweek, the intent-to-treat effects of the implicit format on knowledge, gender norms, and acceptability of violenceagainst women oscillated between 0.16 and 0.21 standard deviations yet impacts diminished after four months. Bycontrast, the explicit format was more impactful in the short term in increasing willingness to share video clipswith friends and promoting online information-seeking behaviors. In the medium term, individuals who were exposedto the docuseries were 91 percent (7.5 percentage points) more likely to add a frame against violence against women intheir Facebook profile picture, a public display of their disapproval of this harmful practice. The general lack ofheterogeneous effects across social status indicators suggests social media as a potential medium for reachingdifferent online populations, including vulnerable ones. |
| Date: | 2022–10–05 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:10199&r= |
| By: | Matthijs R. Wildenbeest (University of Arizona and CEPR, McClelland Hall, 1130 E Helen St, Tucson, AZ 85721) |
| Abstract: | This paper develops a structural model of online news consumption that explicitly takes into account that consumers may not consider all online news sources. Using a unique data set that contains browsing behavior of a large number of individuals as well as survey data that contains their political outlook, we estimate to what extent online news consumption choices are driven by the ideology and quality of online news sources when consideration is limited. We find that estimation of our consideration set model leads to mostly larger estimates of the quality of news sources and better fits joint visiting patterns observed in the data than a full consideration model. These findings have implications for counterfactuals in which the availability of news sources changes, and may lead to different predictions with respect to how these changes affect online segregation. |
| Keywords: | online news; consideration set models; online segregation |
| JEL: | C13 D83 L15 L82 |
| Date: | 2022–10 |
| URL: | http://d.repec.org/n?u=RePEc:net:wpaper:2210&r= |
| By: | Estrella Gomez-Herrera; Sabine Köszegi |
| Abstract: | How do gender stereotypes and gendered work segregation, and digitalisation and automation, result in a vicious cycle of digital gender inequality? |
| Date: | 2022–08 |
| URL: | http://d.repec.org/n?u=RePEc:bre:wpaper:node_8264&r= |
| By: | Marco Di Maggio; Emily Williams; Justin Katz |
| Abstract: | Firms offering “buy now, pay later” (BNPL) point-of-sale installment loans with minimal underwriting and low interest have captured a growing fraction of the market for short-term unsecured consumer credit. We provide a detailed look into the US BNPL market by constructing a large panel of BNPL users from transaction-level data. We document characteristics of users and usage patterns, and use BNPL roll-out to provide new insights into consumer responses to unsecured credit access. BNPL access increases both total spending levels and the retail share in total spending, with magnitudes too large for standard intertemporal and static substitution effects to explain. These findings hold for consumers with and without inferred liquidity constraints. Our findings are more consistent with a “liquidity flypaper effect” where additional retail liquidity through BNPL “sticks where it hits”, than a standard lifecycle model with liquidity constraints. |
| JEL: | G23 G40 G5 G51 |
| Date: | 2022–09 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:30508&r= |
| By: | Faudot, Adrien; Marinova, Tsvetelina; Nenovsky, Nikolay |
| Abstract: | Today's fragmentation of the world economy, the emergence in the near future of large economic blocs operating in different ideological and conceptual models of economy and society, and the fierce struggle for resources and influence, logically lead us turn to history, including the recent one. The issue of the functioning and collapse of the socialist monetary community has another, more specific but also topical meaning. It has to do with understanding the mechanisms of disintegration of the European Union and the euro area, its management and eventual overcoming. In this paper, we focus on the study of monetary mechanisms within the socialist system, and more specifically on its model of integration, the Comecon, which lasted from 1949 to 1991. In the first part we present the basic principles of socialist integration and the role of international socialist money. In the second part we present the main stages in the evolution of the monetary mechanisms of Comecon. The third part is devoted to some technical problems of multilateral payments and the peculiarities of the transfer ruble. Finally, we try to compare with European Payment Union. We present some competing hypotheses, answering the question why the monetary system of Comecon failed. |
| Keywords: | socialist integration, Comecon, transferable ruble, European Payment Union, Soviet Union, commodity-money relations, multilateral clearing |
| JEL: | E42 F15 F45 N14 N24 P30 |
| Date: | 2022–07–20 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:114701&r= |
| By: | Julian Aramburu; Ana Goicoechea |
| Keywords: | Gender - Gender and Education Information and Communication Technologies - Digital Divide Information and Communication Technologies - ICT Policy and Strategies Information and Communication Technologies - Information Technology Poverty Reduction - Inequality Social Protections and Labor - Labor Policies |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wboper:35374&r= |
| By: | Silva, Thiago; Souza, Sérgio; Guerra, Solange; Tabak, Benjamin |
| Abstract: | The literature measures a bank's market power using aggregated data at the bank level. However, market power may be exercised in a decentralized way by each bank branch and for specific banking products. This article proposes a novel methodology for estimating a bank's market power at the branch level in each locality and for each banking product. We find significant heterogeneity in banks' market power by locality and product, even within the same bank. Our results suggest that aggregate measures of bank market power may be misleading and distorted. Accurate quantification of market power requires fine-grained measures, which are essential for enhancing financial regulation and competition. |
| Keywords: | market power, Lerner index, competition, credit market, COVID-19 |
| JEL: | C51 G20 G21 L11 |
| Date: | 2022–09–27 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:114766&r= |
| By: | Maxim Bichuch; Zachary Feinstein |
| Abstract: | Within this work we consider an axiomatic framework for Automated Market Makers (AMMs). By imposing reasonable axioms on the underlying utility function, we are able to characterize the properties of the swap size of the assets and of the resulting pricing oracle. We have analyzed many existing AMMs and shown that the vast majority of them satisfy our axioms. We have also considered the question of fees and divergence loss. In doing so, we have proposed a new fee structure so as to make the AMM indifferent to transaction splitting. Finally, we have proposed a novel AMM that has nice analytical properties and provides a large range over which there is no divergence loss. |
| Date: | 2022–10 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2210.01227&r= |
| By: | Dipankar Das |
| Abstract: | In electronic commerce (e-commerce)markets, a decision-maker faces a sequential choice problem. Third-party intervention plays an important role in making purchase decisions in this choice process. For instance, while purchasing products/services online, a buyer's choice or behavior is often affected by the overall reviewers' ratings, feedback, etc. Moreover, the reviewer is also a decision-maker. After purchase, the decision-maker would put forth their reviews for the product, online. Such reviews would affect the purchase decision of another potential buyer, who would read the reviews before conforming to his/her final purchase. The question that arises is \textit{how trustworthy are these review reports and ratings?} The trustworthiness of these review reports and ratings is based on whether the reviewer is a rational or an irrational person. Indexing the reviewer's rationality could be a way to quantify a reviewer's rationality but it does not communicate the history of his/her behavior. In this article, the researcher aims at formally deriving a rationality pattern function and thereby, the degree of rationality of the decision-maker or the reviewer in the sequential choice problem in the e-commerce markets. Applying such a rationality pattern function could make it easier to quantify the rational behavior of an agent who participates in the digital markets. This, in turn, is expected to minimize the information asymmetry within the decision-making process and identify the paid reviewers or manipulative reviews. |
| Date: | 2022–10 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2210.00815&r= |
| By: | Jatin Nainani (K. J. Somaiya College of Engineering); Nirman Taterh (K. J. Somaiya College of Engineering); Md Ausaf Rashid (K. J. Somaiya College of Engineering); Ankit Khivasara (K. J. Somaiya College of Engineering) |
| Abstract: | For a long time predicting, studying and analyzing financial indices has been of major interest for the financial community. Recently, there has been a growing interest in the Deep-Learning community to make use of reinforcement learning which has surpassed many of the previous benchmarks in a lot of fields. Our method provides a feature rich environment for the reinforcement learning agent to work on. The aim is to provide long term profits to the user so, we took into consideration the most reliable technical indicators. We have also developed a custom indicator which would provide better insights of the Bitcoin market to the user. The Bitcoin market follows the emotions and sentiments of the traders, so another element of our trading environment is the overall daily Sentiment Score of the market on Twitter. The agent is tested for a period of 685 days which also included the volatile period of Covid-19. It has been capable of providing reliable recommendations which give an average profit of about 69%. Finally, the agent is also capable of suggesting the optimal actions to the user through a website. Users on the website can also access the visualizations of the indicators to help fortify their decisions. |
| Date: | 2022–09 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2209.12664&r= |
| By: | Dinarte Diaz,Lelys Ileana; Jaume,David Jose; Medina-Cortina,Eduardo; Winkler,Hernan |
| Abstract: | Despite concerns that the COVID-19 economic collapse would torpedo international remittances,formal remittances to several developing countries ballooned early in the pandemic. This increase might, however, havereflected a shift from informal channels to formal ones rather than a change in actual flows. This paper employsMexican data to explore this and finds that remittance channels did change. The rise in formal inflows was largeramong municipalities that were previously more reliant on informal channels (for example, near a border crossing).Households there also experienced a disproportionate increase in bank accounts opened after lockdown measures.The paper also rules out hypotheses related to the US Coronavirus Aid, Relief, and. Economic Security Act and altruism. |
| Date: | 2022–05–23 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:10057&r= |
| By: | Souheila Kaabachi (EBS Paris - European Business School Paris, ESCE International Business School, INSEEC U. Research Center); Mohamed Karim Kefi (EDC - EDC Paris Business School, OCRE - Observatoire et Centre de Recherche en Entrepreneuriat - EDC - EDC Paris Business School); Monyédodo Régis Kpossa (ESCE, International Business School - ESCE, INSEEC SBE - INSEEC School of Business & Economics - INSEEC Business School - Institut des hautes études économiques et commerciales Business School (INSEEC)); Ahmed Anis Charfi (ISTEC - Institut supérieur des Sciences, Techniques et Economie Commerciales - ISTEC) |
| Abstract: | This study extends celebrity endorsement and influencer endorsement to financial brand communication and explores the Generation Z (Gen-Z) attitudes toward financial advertising using an endorsement strategy. We investigate the effect of endorser type on the endorsement strategy effectiveness. This research is based on an experiment involving a total of 313 students aged 18 to 25 years old. Structural equation modelling (Amos Graphics 25) and MANOVA were used to analyse the data. Our findings support that Gen-Zers perceived social media influencers (SMIs') image as more congruent with financial brand image and more credible, with more altruistic motives than traditional celebrities. Indeed, this study showed that brand-endorser congruence and idealself- image congruence contributes to the attribution of altruistic motives to the endorser, which in turn influences endorser credibility. Gen-Zers' ad attitude is mainly impacted by the endorser attractiveness and trustworthiness. This research highlights the interest of financial institutions in using SMI when advertising to Gen-Z. |
| Abstract: | Cette étude étend la recherche sur l'endossement publicitaire par les célébrités et les influenceurs à la communication des institutions financières. Elle explore l'attitude de la génération Z à l'égard des publicités des produits financiers mettant en oeuvre une stratégie d'endossement. Nous analysons l'effet du type d'endosseur (célébrité versus influenceur) sur l'efficacité d'une stratégie d'endossement. Une expérimentation a été menée sur un échantillon de 313 étudiants âgés de 18-25 ans. La modélisation par équations structurelles (Amos graphics 25) et la MANOVA ont été utilisées pour analyser les données. Les résultats montrent que comparé aux célébrités, la génération Z perçoit l'image des influenceurs plus congruente avec celle la marque financière. Ils sont également plus crédibles et dotés de motivations altruistes. L'étude montre que l'attribution de motivations altruistes à l'endosseur contribue fortement à la perception de sa crédibilité. Une forte congruence entre l'image de l'endosseur et l'image de la marque et une forte congruence entre l'image de l'endosseur avec l'image idéale que la génération Z souhaite avoir d'elle-même contribuent fortement à l'attribution de motivations altruistes à l'endosseur. L'attitude de la génération Z envers la publicité est influencée principalement par l'attrait physique de l'endosseur et la confiance qu'il suscite. Cette recherche met en évidence l'intérêt pour les marques financières d'utiliser les influenceurs pour communiquer efficacement auprès de la génération Z. |
| Keywords: | Financial services,endorsement strategy,Gen-Z,Traditional celebrity,Social media influencer,Services financiers,stratégie d'endossement,Génération Z,célébrité,influenceurs des médias sociaux |
| Date: | 2021–12–01 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-03767446&r= |
| By: | Ron Berman (The Wharton School, University of Pennsylvania, 3730 Walnut Street, Philadelphia, PA 19104); Aniko Oery (Yale School of Management, 165 Whitney Avenue, New Haven, CT 06511); Xudong Zheng (Department of Economics, Johns Hopkins University, 3400 North Charles Street, Baltimore, MD 21218) |
| Abstract: | We analyze influencer marketing and advertising campaigns that can facilitate learning about uncertain qualities of products, while making consumers aware of them. We establish conditions for when influencer marketing, which lets consumers learn from other followers, is preferred to advertising, that does not enable such information sharing. Influencers facilitate learning when they are consistent in their post quality and have homogeneous followers relative to the degree of targeting of advertising campaigns. Whether efficient learning increases profits depends on the quality uncertainty of the product, e.g., whether the brand is established or unknown. For established brands, we find that many micro-influencers are more profitable than a targeted ad campaign, while for unknown brands, either macro-influencers with many followers or micro-influencers are more profitable. We also show that influencer campaigns tend to either "go viral" or "go bust", highlighting the value of ex-post promotional coupons. Additionally, for niche products we find that the heterogeneity of the follower base affects learning efficiency the most, while for mass products, the creativity of the influencer is the more important factor. |
| Keywords: | Influencer marketing; social learning; online advertising; word of mouth |
| JEL: | M31 M37 D83 |
| Date: | 2022–09 |
| URL: | http://d.repec.org/n?u=RePEc:net:wpaper:2208&r= |
| By: | Michel Grabisch (CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique, PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris sciences et lettres - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, UP1 - Université Paris 1 Panthéon-Sorbonne); Antoine Mandel (CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique, PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris sciences et lettres - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, UP1 - Université Paris 1 Panthéon-Sorbonne); Agnieszka Rusinowska (CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique, PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris sciences et lettres - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, CNRS - Centre National de la Recherche Scientifique) |
| Abstract: | We propose a model of the joint evolution of opinions and social relationships in a setting where social influence decays over time. The dynamics are based on bounded confidence: social connections between individuals with distant opinions are severed while new connections are formed between individuals with similar opinions. Our model naturally gives raise to strong diversity, i.e., the persistence of heterogeneous opinions in connected societies, a phenomenon that most existing models fail to capture. The intensity of social interactions is the key parameter that governs the dynamics. First, it determines the asymptotic distribution of opinions. In particular, increasing the intensity of social interactions brings society closer to consensus. Second, it determines the risk of polarization, which is shown to increase with the intensity of social interactions. Our results allow to frame the problem of the design of public debates in a formal setting. We hence characterize the optimal strategy for a social planner who controls the intensity of the public debate and thus faces a trade-off between the pursuit of social consensus and the risk of polarization. We also consider applications to political campaigning and show that both minority and majority candidates can have incentives to lead society towards polarization. |
| Keywords: | opinion dynamics,network formation,network fragility,polarization,institution design,political campaign |
| Date: | 2022–07–02 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-03770884&r= |
| By: | Christophe J. GODLEWSKI (LaRGE Research Center, Université de Strasbourg); Katarzyna BYRKA-KITA (Institute of Economics and Finance, Uniwersytet Szczecinski); Renata GOLA (Institute of Economics and Finance, Uniwersytet Szczecinski); Jacek CYPRYJANSKI (Institute of Economics and Finance, Uniwersytet Szczecinski) |
| Abstract: | We investigate the link between social media activity and market valuation of listed European companies over the period January 2018 – June 2020. Using a large novel dataset from 39 European capital markets, we first provide a comprehensive “big picture” of social media activity of European listed companies, using data from all European capital markets. Second, we show that greater Twitter activity is associated with increased shareholders’ returns. Third, we find that portfolios with a larger number of tweets posted by a company exhibit larger market risks. Our findings support the idea that investors should consider social media activity when implementing investment strategies. |
| Keywords: | stock markets, valuation, CAPM, Twitter, social media, investor attention, information asymmetry, disclosure. |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:lar:wpaper:2022-04&r= |
| By: | Okunogbe,Oyebola Motunrayo; Santoro,Fabrizio |
| Abstract: | Many African countries struggle to collect an adequate amount of tax revenue to support neededinvestments in public services. This paper examines how African countries may take advantage of recent advances intechnology to improve tax administration. It provides an overview of the potential and challenges of different taxcategories in Africa: consumption taxes, real estate taxes, trade taxes, and income taxes. It then describes the ways inwhich technology solutions may be deployed to address these challenges by helping to identify the tax base, monitorcompliance, and facilitate compliance. Lastly, it provides insights from interviews with senior tax administratorsacross the continent on their practical experiences in adopting technology for taxation. |
| Date: | 2022–09–14 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:10182&r= |
| By: | Jean C. Kouam (Nkafu Policy Institute, Yaoundé, Cameroon); Simplice A. Asongu (Yaoundé, Cameroon); Robert Nantchouang (Nkafu Policy Institute, Yaoundé, Cameroon); Denis Foretia (Nkafu Policy Institute, Yaoundé, Cameroon) |
| Abstract: | The present study contributes to the extant literature by assessing how financial and human developments moderate the incidence of vulnerable female employment on female labour force participation in Cameroon for the period 1987 to 2020 using the generalized least squares (GLS) estimation approach. Human development and financial development moderating or policy variables are also employed in order to improve space for policy implication. It is apparent from the findings that human development in the perspective of the human development index (HDI) and broad money supply are necessary and sufficient conditions to moderate vulnerable female employment for female labour force participation. Accordingly, HDI thresholds of between 0.591 and 0.634 are needed to reverse to the negative incidence of female vulnerable employment on female labour force participation. Furthermore, a threshold of 30.294 (% of GDP) of broad money supply is also needed to reverse the negative incidence of vulnerable female employment on female labour force participation. Other implications for policy are discussed. |
| Keywords: | Gender: Labor force; Cameroon; Sustainable development |
| JEL: | G20 I10 I32 O40 O55 |
| Date: | 2022–01 |
| URL: | http://d.repec.org/n?u=RePEc:aak:wpaper:22/016&r= |
| By: | Mehmet Canayaz (Pennsylvania State University - Smeal College of Business); Ilja Kantorovitch (EPFL); Roxana Mihet (Swiss Finance Institute - HEC Lausanne) |
| Abstract: | We analyze how the adoption of the California Consumer Privacy Act (CCPA), which limits consumer personal data acquisition, processing, and trade, affects voice-AI firms. To derive theoretical predictions, we use a general equilibrium model where firms produce intermediate goods using labor and data in the form of intangible capital, which can be traded subject to a cost representing regulatory and technical challenges. Firms differ in their ability to collect data internally, driven by the size of their customer base and reliance on data. When the introduction of the CCPA increases the cost of trading data, sophisticated firms with small customer bases are hit the hardest. Such firms have a low ability to collect in-house data and high reliance on data and cannot adequately substitute the previously externally purchased data. We utilize novel and hand-collected data on voice-AI firms to provide empirical support for our theoretical predictions. We empirically show that sophisticated firms with voice-AI products experience lower returns on assets than their industry peers after the introduction of the CCPA, and firms with weak customer bases experience the strongest distortionary effects. |
| Keywords: | Privacy, Voice Data, In-House Data, Big Data, Intangible Capital, Product Sentiment |
| JEL: | D80 G30 G31 G38 L20 O30 |
| Date: | 2022–08 |
| URL: | http://d.repec.org/n?u=RePEc:chf:rpseri:rp2268&r= |
| By: | Anastasia Nedayvoda; Peter Mockel; Lana Graf |
| Keywords: | Private Sector Development - Emerging Markets Private Sector Development - Private Sector Economics Science and Technology Development - Technology Innovation |
| Date: | 2020–11 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wboper:34859&r= |
| By: | Marion Drut (CESAER - Centre d'Economie et de Sociologie Rurales Appliquées à l'Agriculture et aux Espaces Ruraux - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement - Institut Agro Dijon - Institut Agro - Institut national d'enseignement supérieur pour l'agriculture, l'alimentation et l'environnement) |
| Date: | 2022–07–27 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-03771891&r= |