Retail Payment Systems: What can we Learn from Two-Sided Markets?

Some retail payment systems can be modelled as two-sided markets, where a payment system facilitates money exchanges between consumers on one side and merchants on the other. The system sets rules and standards, to ensure usage and acceptance of its payment instruments by consumers and merchants respectively. Some retail payment systems exhibit indirect network externalities, which is one of the main criteria used to define two-sided markets. As more consumers use the payment platform, more merchants are encouraged to join it. Conversely, the value of holding payment instruments increases with the number of merchants accepting them. The theory of two-sided markets contributes to a better understanding of these retail payment systems, by showing that an asymmetric allocation of costs is needed to maximise the volume of transactions. It also starts to offer results that could explain competition between payment platforms. However, this theory entails some limits to a thorough understanding of retail payment systems. Firstly, we show that some retail payment systems, such as credit transfer or direct debit systems, do not necessarily fulfil all the theoretical criteria used to define twosided markets. Moreover, this theory does not take into account specific features of the payment industry, such as risk management or fraud prevention. This leads us to propose new research directions.payment systems; two-sided markets; platform competition; payment cards

What Drives Long-term Capital Flows? A Theoretical and Empirical Investigation

What drives capital inflows in the long run? Do they follow the predictions of neoclassical theory, or are other forces at work? The purpose of this paper is to illustrate how long-term capital movements conform surprisingly well to the predictions of a simple neoclassical model with credit constraints. The most surprising prediction of this class of models is that, contrary to a pure neoclassical model, domestic savings should act as a complement rather than a substitute to capital inflows. Nevertheless, this class of models keeps the neoclassical prediction that, ceteris paribus, capital should flow to the countries where it is most scarce. Using data on net foreign liabilities over the 1970 to 1997 period, I find evidence that supports these predictions.credit constraints, net external debt, capital flows, savings, convergence

Globalization and the Empowerment of Talent

Lecture on the first SFB/TR 15 meeting, Gummersbach, July, 18 - 20, 2004Globalization has been identified by many experts as a new way firms organize their activities and as the emergence of talent as the new stakeholder in the firm. This paper examines the role of trade integration for the changing nature of the corporation. International trade leads to a ’war for talent’ which makes it more likely that an organizational equilibrium emerges in the integrated world economy in which control is delegated to lower levels of the firms’ hierarchy empowering human capital. Furthermore, trade integration is shown to lead to waves of outsourcing and to convergence in corporate cultures across countries

Power Inside the Firm and the Market

Recent years have witnessed an enormous amount of reorganization of the corporate sector in the US and in Europe. This paper examines the role of market competition for this trend in corporate reorganization. We find that at intermediate levels of competition the CEO of the corporation decides to have less power inside the firm and to delegate control to lower levels of the firms’ hierarchy. Thus, workers empowerment and the move to flatter firm organizations emerge as an equilibrium when competition is not too tough and not too weak. The model predicts merger waves or waves of outsourcing when countries become more integrated into the world economy as the corporate sector reorganizes in response to an increase in international competition

Power Inside the Firm and the Market: A General Equilibrium Approach

Recent years have witnessed an enormous amount of reorganization of the corporate sector in the US and in Europe. This paper examines the role of market competition for this trend in corporate reorganization. We find that at intermediate levels of competition the CEO of the corporation decides to have less power inside the firm and to delegate control to lower levels of the firms’ hierarchy. Thus, workers empowerment and the move to flatter firm organizations emerge as an equilibrium when competition is not too tough and not too weak. The model predicts merger waves or waves of outsourcing when countries become more integrated into the world economy as the corporate sector reorganizes in response to an increase in international competition

LHC sensitivity to the decay of a Higgs boson to tau mu

We study the sensitivity of the LHC, with 20 inverse-fb of data, to lepton flavour violating Higgs boson decays h -> tau+ mu- (and h -> tau+ e-). We consider the large population of Higgses produced in gluon fusion, combined with leptonic decays of the tau, and estimate that the LHC could set a 95 % confidence level bound BR(h -> tau mu) < 4.5 \times 10^{-3}. This correponds to a coupling of order the Cheng-Sher ansatz y_{tau mu} = sqrt{m_tau m_mu/v^2}.Comment: 6 pages, 4 figures, references adde

Law Enforcement and Transition

We present a simple model to analyze law enforcement problems in transition economies. Law enforcement implies coordination problems and multiplicity of equilibria due to a law abidnce and a fiscal externality. We analyze two institutional mechanisms for solving the coordination problem. A first mechanism is what we call "dualism", follows the scenario of Chinese transition where the government keeps direct control over economic resources and where a liberalized non state sector follows market rules. The second mechanism we put forward is accession to the European Union. We show that accession to the European Union, even without external borrowing, provides a mechanism to eliminate the "bad" equilibrium, provided the "accesing" country is small enough relative to the European Union. Interestingly, we show that accession without conditionality is better than with conditionality because conditionality creates a coordination problem of its own that partly annihilates the positive effects of expected accession.http://deepblue.lib.umich.edu/bitstream/2027.42/39647/3/wp262.pd

Time-Periodic Solutions of the Burgers Equation

We investigate the time periodic solutions to the viscous Burgers equation $u_t -\mu u_{xx} + uu_x = f$ for irregular forcing terms. We prove that the corresponding Burgers operator is a diffeomorphism between appropriate function spaces

Cultural Transmission, Marriage and the Evolution of Ethnic and Religious Traits

Cultural Transmission; marriage

When NGOs Go Global: Competition on International Markets for Development Donations

Why many large non-governmental organizations (NGOs) are becoming multinational entities? What are the welfare implications of this integration of markets for development donations? To answer these questions, we build a simple two-country model with horizontally differentiated NGOs competing through fundraising effort. We find that NGOs become multinational if the economies of scale in fundraising are sufficiently large. In that case, national NGOs in the smaller country disappear, while some national NGOs remain in the larger country only if the difference in the countries' size is large enough. Social welfare is higher in the regime with multinationals than under autarky.non-governmental organizations, charitable giving, globalization, multinational firms