Journal articles on the topic 'Incumbent banks'

This research examines the way in which traditional banks are competing against the emerging fintech startups. This study identifies driving factors and uniqueness that illustrate the peculiar characteristics of incumbents, analyzes their internal readiness and capabilities, and examines their strategic response against fintech startups. In doing so, this paper examines Small Town Bank (STB)1, a regional bank in Indonesia, regarding its ability to innovate. Data are obtained from primary sources through internal and external questionnaires, as well as secondary data. The results of the study indicate that, in general, the bank already has a reasonably good innovation readiness, but there are several aspects that need to be noted, namely: optimization of current services, consolidation, and internal restructuration. Concurrently, while fintech has a very broad and massive technical and managerial impact, it does not mean that incumbent banks and traditional financial services cannot compete.

Exploiting differential interstate-branching deregulation across contiguous counties of adjacent states, we investigate the effect of entry threat on incumbent banks’ loan-loss provisions. Incumbents exposed to entry threat have offsetting incentives; lower provisions make their loan-underwriting quality appear better, deterring entry, but make local economic conditions appear better, encouraging entry. We find that the incentive to increase apparent loan-underwriting quality dominates on average. We further find that this incentive is stronger in counties with a higher proportion of heterogeneous loans, while the other incentive dominates in counties with both low heterogeneous loans and highly volatile economic conditions.

PurposeThe purpose of this paper is to investigate the conditions under which working with an incumbent downstream competitor could be a beneficial strategy for upstream firms as the case of the relationship between banks and third-party payment providers.Design/methodology/approachUsing a game model, this study considers a market with two upstream firms (banks) and two downstream firms (third-party payment providers). One downstream firm is an incumbent that poses a competitive threat to the upstream market, and the other downstream firm does not.FindingsThe results show that the optimal decision for banks depends on the number of loyal users the incumbent third-party payment providers and banks have. When the bank has more loyal users than the competitive third-party provider to a certain level, it would terminate cooperation with the provider; otherwise, the bank would maintain cooperation. This is true whether the duopoly banks are symmetrical or asymmetrical.Originality/valueThis study makes contribution to the theory of co-opetition lies in the fact that it examines a special case of competition and cooperation between vertical enterprises in the bank context. This study investigates how the upstream firms do when threatened by a downstream firm while the upstream firms have other options. This study also contributes to bank marketing theory through providing explanations for some of the incomprehensible cooperation in China's payment market, which is characterized by consumer loyalty. This study extends previous new-entry competition for banks by differentiating between incumbent and new-entry downstream firms.Peer reviewThe peer review history for this article is available at: https://publons.com/publon/10.1108/IJBM-11-2019-0414

Digital transformation has received considerable scholarly attention in areas of management, business, information systems, information technology and marketing. In particular, retail banks have been at the forefront of technological revolution characterized by rapid deployment and innovation of digital services, exponential pace of change and innovative breakthroughs that alter conventional banking practice. However, the term digital transformation is often misunderstood as a straightforward deployment of the latest information communication technologies. In practice, technological investments entail not only risk but also require an understanding of the relationship between technological, organizational culture and institutional change within certain boundaries of regulatory framework. Digital transformation is far from simple, certain or predictable and likely to be disruptive or transformative with immutable impacts upon associated organizational outcomes related to technical capabilities and behaviours. The present study attempts to explore and develop a framework for understanding digital transformation by examining the development, deployment and use of digital technologies in retail banking. Within a social informatics perspective, this study examines the effects of digital technologies on retail banks operations, structure and capabilities of those who deploy, implement and use it. Using a grounded theory approach, the study explores theoretical constructs by reviewing the literature and analysing primary field data including data from retail banks and interviews with senior professionals. The findings provide the pitfalls and successful approaches towards the digital transformation journey. This includes the ordinary dilemmas that the managers face to deliver the projects at hand.

AbstractWe analyze the profitability of government-owned banks’ lending to their owners, using a unique data set of relatively homogeneous government-owned banks; the banks are all owned by similarly structured local governments in a single country. Making use of a natural experiment that altered the regulatory and competitive environment, we find evidence that such lending was used to transfer revenues from the banks to the governments. Some of the evidence is particularly pronounced in localities where the incumbent politicians face significant competition for reelection.

This study examines whether state-owned banks face political pressure and whether the improvement in political institutions alleviates this pressure. The theory of political benefits argues that politicians use state-owned banks for political purposes such as obtaining and maintaining political support. We reviewed extant empirical research and found that the existing evidence is mixed; some studies support while others reject the theory. In this backdrop, we analyzed a sample of 185 state-owned banks from 51 developing countries over the period 1998–2012 and provide renewed evidence supporting the theory. Specifically, we found that state-owned banks face significant political pressure in developing countries; that is, they lend more and earn less in election years. Next, we observed that the political pressure is prevalent only in the countries with weak political institutions. Strong political institutions in the form of higher constraints on policy change decisions of incumbent government and higher democratic accountability are helpful in eliminating political pressure on state-owned banks in developing countries.

Our study highlights a literature map on Fintech and the risks associated with this technological innovation in the financial sector. Considering all the studies published from 2014 to 2021 in "Scopus", we resort to econometric techniques to create our map. Our results show the recent attention of academics and researchers, mainly belonging to the technological and IT areas, towards Fintech. In particular, the studies focus on the issue of emerging technologies applied to investment and credit processes linked to the assessment of customer insolvency risk. For this reason, the existing analyzes adopt a mainly technical approach with very limited attention to strategic, organizational and managerial aspects typical of financial intermediation. Future studies could investigate the issue of Fintech behavior and relations with incumbent banks, as well as the risks that the applications of emerging digital technologies have on the sound and prudent management of these operators. In addition, further analysis can capture the risks of Fintech for clients, taking into account financial education. These are important aspects for the growth of Fintechs themselves, for the sustainability of the incumbent banks, with which they increasingly collaborate, and obviously for the banking supervisory authorities, attentive to the stability, efficiency and competitiveness of the financial sector as a whole.

This paper argues that Chinese state enterprise reform has been relatively successful in solving the short-term managerial incentive problem through both its formal, explicit incentive mechanism and its informal, implicit incentive mechanism. However, it has failed to solve the long-term managerial incentive problem and the management selection problem. An incumbent manager may have incentives to make short-term (but hidden) profits, but at present there is no mechanism to ensure that only qualified people will be selected for management. The fundamental reason is that managers of SOEs are selected by bureaucrats rather than capitalists. Since bureaucrats have the authority to select managers but do not need bear the consequences of their selection, they have no proper incentives to find and appoint high ability people. Since good performance does not guarantee that the incumbent manager will stay long, the manager does not have long-term incentives. The paper also argues that these built-in problems of state ownership cannot be solved by state-dominated corporatization. Bankruptcy has not played a role in disciplining managers because the state-owned banks have neither the incentive nor the ability to enforce debt contracts. To ensure that only high ability people will be professional managers and that managers can be well disciplined, the authority of selecting management must be transferred from bureaucrats to capitalists. This calls for privatization of both state enterprises and state banks. China is well on its way to privatization of state enterprises, but privatization of state banks is yet to come

Purpose Actions of incumbent politicians and firms’ managers during election years have been cited as sources of many problems that afflict economies and business entities. Given the controversies surrounding the impact of elections on firms’ soundness, this paper poses a question of whether banks should be averse to elections. Specifically, this study aims to investigate the impact of elections on the profitability and efficiency of banks. Design/methodology/approach Based on the authors’ knowledge, this is maiden analysis in this context for Ghana where relatively advanced appropriate GMM technique has been used on annual data from 2012 to 2016. Findings This study reveals that banks make higher returns in election years. Additionally, the authors report that government’s economic policies in election years are detrimental to management efficiency, though insignificant. Practical implications From an emerging economy perspective, this study would guide policymakers in designing policies that respond to, or minimize, the impact of elections on bank performance. The result of this analysis would also substantiate the market reaction to the changes in the economic, political and financial conditions. Originality/value This analysis suggests that firms’ performances in an election year depend on policies and political institutions in place. The authors argue that Ghana, with its exemplary democratic credentials and strong institutions, living alongside a high perception of corruption, is different. The contribution to literature is, first, by limiting this work to the banking sector of Ghana and, second, by incorporating the behaviors of incumbent governments and individuals in the regression specification model.

How is the rise of China affecting international governance? This paper examines the domain of infrastructure finance by focusing on China’s two policy banks, which are the main creditors of China’s overseas infrastructure projects. While the incumbent international credit regimes led by the Organisation for Economic Co-operation and Development (OECD) distinguish development-oriented aid from commercially oriented export credits, emerging late-developed economies blur this dichotomy by largely funding development projects with state-backed export credits. The way China alters the OECD’s credit governance, this paper argues, demonstrates both the generality of late development and the peculiarity of “Chinese” development. Rather than directly subsidizing firms’ international business with the state’s fiscal revenue, policy banks financialized host country’s state-owned and state-coordinated assets using various market instruments. By doing so, they gave Chinese firms a comparative advantage in the markets of less developed regions, allowing them to undertake projects that firms from advanced industrial countries cannot. This financing mechanism has reshaped the international development regime by transforming the dominant means of credit allocation from state-led aid-giving to market-based exchange, and rewritten the liberal rules of the international export credit regime by financing the developing world in a both statist and liberalist manner. As a result, China has built a paralleled regime in regions insufficiently covered by the existing financial schemes of incumbent credit regimes.

Offshore financial centres have attracted considerable critical attention over the past few decades as havens for lightly taxed funds that circulate outside the regulatory oversight of major financial centres. This article addresses the emergence of an offshore market in US dollars in Singapore from the late 1960s using a range of archival sources to identify the motivations of the host, participant banks and regional rivals. The development of the Asia dollar market is particularly striking because Singapore was not the most likely venue for an Asian offshore financial centre. The main regional financial centre was Hong Kong, but the Hong Kong authorities made a deliberate choice not to host an offshore market in Hong Kong, a decision that was initially supported both by the state and by incumbent banks, although the banks later changed their view as the Singapore market grew. This case thus opens up discussion of the influence market actors exert over regulators when they are engaged in regulatory arbitrage as well as regulatory competition between states. Evidence is also presented about the efforts of the Bank for International Settlements to encourage greater transparency in offshore financial centres in the 1980s.

The banking industri in Indonesia is growing rapidly nowadays. To support their operating system, the banking industriapplies dual-banking system. It is a system where banking serves two kinds of service to the society, that is conventional and sharia.The dual-banking system aim to give them an alternative choice of banking service so that it will increase the growth of financing in the national economic sector. The more customer of theIslamic bank, the more financing activity can be done. As a new comer in the banking industri, Islamic bank should compete with the incumbent of this industri, that is conventional bank. The important aspect to compete with the competitor is service quality. Furthermore, with the high satisfaction and trust of customers on the service of the Islamic bank, the more they will recommend to the society for having a transaction in Islamic bank so that it will help the growth of Islamic banks. This study learns about the customer’s assessment of the service quality of Islamic banks in Indonesia. Data were obtained randomly using a questionnaire instrument that adopted from the research of Siddiqi and Amin. The result of this research that analyzed using an ordinary least square model (OLS) shows that the variable of service quality and customer satisfaction significantly effect on customer loyalty of Islamic banks.

Purpose This paper focuses on bank audit committees and examines whether audit committee members who are former auditors are associated with the acquisition of audit and non-audit services from their former employers. Design/methodology/approach The study empirically examines a sample of large banks that are included in the S&P Composite 1500. Findings The paper reports significantly lower audit fees and a higher proportion of non-audit fees to total fees when the audit committee chair is an alumnus of the incumbent audit firm. Moreover, additional analysis reveals that these findings are stronger for banks with more earnings management. Research limitations/implications Overall, the findings indicate that audit firms might consider banks using their alumni as audit committee chairs to be less risky or easier to audit, thus requiring relatively less effort from the auditors. The reduced effort required to audit clients with audit firm alumni on their audit committees then has the effect of reducing the audit fees charged. Alternatively, their auditing experience and cognitive proximity might influence the assessment of the need for auditing or the ability to negotiate lower audit fees on the part of audit firm alumni. Originality/value This paper provides empirical evidence of the association between audit firm alumni in influential positions on an audit committee and fees paid to those audit firms in the banking industry. The findings contribute to the literature by suggesting that banks with affiliated former auditors chairing their audit committees not only have significantly lower audit fees but also a higher proportion is spent on non-audit services.

Purpose The purpose of this study is to describe the use of an intersectionality framework to analyze and incorporate teachers’ lived experiences into critical professional development. Design/methodology/approach Researchers used qualitative coding based on the matrix of oppression and privilege (Ferber and O’Reilly Herrera, 2013) to analyze teachers’ multicultural autobiographies. Connections between multicultural autobiographies were then made between other course reflections and lesson plans that were developed throughout the 150 h of professional development. Findings Findings evidence the multiple sites of oppression and privilege, the importance of spaces and relationships in locating ourselves and others on the matrix and the possibilities for transferring knowledge to professional practice. Research limitations/implications The authors do recognize the limitations of their study. Although the participants were from differing educational contexts and backgrounds, the sample size was small. Additional studies of this nature can expand our understanding of privilege, oppression and the impact of critical professional development for educators. Our society, and therefore the education system, continues to become more culturally and linguistically diverse, and it is incumbent upon us as educators and researchers to identify effective approaches for preparing both teachers and students for a changing world. Practical implications The power of the matrix framework in pedagogical settings is that it facilitates the recognition and analysis of individual social locations and their relationships to various systems of inequality. Most importantly, analyzing both privilege and oppression allows individuals and instructors to reflect on their own experiences and initiate conversations that reduce the animosity toward those who have different experiences. Originality/value This study is significant, in that it offers a framework that addresses the perceived disconnect between teachers and their increasingly culturally and linguistically diverse student population (Banks and Banks, 2013; Darling-Hammond and Bransford, 2005).

Since the crisis of 2007–2009, sovereignty, government and politics are on the agenda of social sciences and of international policy platforms, most recently in Davos. This is a departure from anti-statist, free-tradist visions of global market development in the 1980s and 1990s when sovereignty was simply associated with freedom of action of economic actors (most significantly, global corporations and banks) and governance simply referred to technical rules serving the ends of these actors posed in terms of dictates of the market. This paper points to societal dislocations (e.g. income discrepancies, unemployment) incumbent on global market development and to a time lag in which these made themselves felt in the developed and developing world. It argues that the developing world experienced the disillusionment with markets in the latter part of 1990s and early 2000s and sought solutions in effective governments, putting them in the service of reaping the benefits of global market expansion for individual regions. It meant non-liberal ways of governing markets, distancing from abstract formulations of individual rights, turning the ‘rule of law’ into living law deeply rooted in societal concerns not limited to commercial actors but including those of both blue-collar and white collar workers, of migrant populations, and women. At issue is an introduction of politics, of political agency and initiatives. The developed world rejected what is labeled as an ‘autocratic turn’; and is lost for a solution to market woes, except for further measures to maximize gains by major commercial actors, as in the case of the Greek crisis.

Under what conditions can opposition politicians with ethnic constituencies form electoral coalitions? In Africa's patronage-based political systems, incumbents form coalitions by using state resources to secure the endorsement of politicians from other ethnic groups. Opposition politicians, however, must rely on private resources to do the same. This article presents a political economy theory to explain how the relative autonomy of business from state-controlled capital influences the formation of multiethnic opposition coalitions. It shows that the opposition is unlikely to coalesce across ethnic cleavages where incumbents use their influence over banking and credit to command the political allegiance of business—the largest potential funder of opposition in poor countries. Liberalizing financial reforms, in freeing business to diversify political contributions without fear of reprisal, enable opposition politicians to access the resources needed to mimic the incumbent's pecuniary coalition-building strategy. A binomial logistic regression analysis of executive elections held across Africa between 1990 and 2005 corroborates the theoretical claim: greater financial autonomy for business—as proxied by the number of commercial banks and the provision of credit to the private sector—significantly increases the likelihood of multiethnic opposition coalitions being formed.

AbstractDoes ‘inner competition’ – rivalry among network members – worsen performance in a network of cooperative banks? By weakening the functionality of the network, inner competition might, in fact, endanger network-dependent scale economies. Testing our hypothesis on Italy's network of mutual cooperative banks (Banche di Credito Cooperativo – BCCs), we find a worsening of performance of both incumbents and (even more) aggressors when BCCs compete among themselves. However, the worsening is mild when BCCs compete with comparable non-mutual banks external to the BCC network. We conclude that inner competition among cooperative banks is a negative sum game and, thus, limiting it would be desirable to preserve the stability of cooperative banking networks.

The rapid development of modern technology and the increasing number of FinTechs can bring new competition challenges to incumbents. First, the author identifies the most important technologies implemented in the financial sector, such as artificial intelligence, machine learning, APIs, cloud computing, mobile technology and DLT. Next, she analyses BigTechs’ customer-centric platform-based business model and its impact on competition in the financial sector. The expansion of BigTechs into finance should lower the barriers to entry by reducing information and transaction costs, and thereby enhance financial inclusion. However, the long-term impact could be negative as BigTechs can exploit their market power to increase user switching costs and/or to exclude potential competitors. The impact of smaller FinTechs on competition seems to be more beneficial as they rather collaborate than compete with incumbents (especially with banks) while bank – FinTech alliances aim at improving the prospects and the market value of both FinTechs and banks.

A diversity of wireless technologies will collaborate to support the fifth-generation (5G) communication networks with their demanding applications and services. Despite decisive progress in many enabling solutions, next-generation cellular deployments may still suffer from a glaring lack of bandwidth due to inefficient utilization of radio spectrum, which calls for immediate action. To this end, several capable frameworks have recently emerged to all help the mobile network operators (MNOs) leverage the abundant frequency bands that are utilized lightly by other incumbents. Along these lines, the recent Licensed Shared Access (LSA) regulatory framework allows for controlled sharing of spectrum between an incumbent and a licensee, such as the MNO, which coexist geographically. This powerful concept has been subject to several early technology demonstrations that confirm its implementation feasibility. However, the full potential of LSA-based spectrum management can only become available if it is empowered to operate dynamically and at high space-time-frequency granularity. Complementing the prior efforts, we in this work outline the functionality that is required by the LSA system to achieve the much needed flexible operation as well as report on the results of our respective live trial that employs a full-fledged commercial-grade cellular network deployment. Our practical results become instrumental to facilitate more dynamic bandwidth sharing and thus promise to advance on the degrees of spectrum utilization in future 5G systems without compromising the service quality of their users.

Open banking has recently been advanced as a measure to foster competition and innovation in the retail banking sector. Since its introduction in the UK, a number of banks have created new digital business models (BMs) that offer individuals and businesses access to more personalized financial services. Yet, it is still unclear what new entrants (smaller and newer banks) have done to potentially disrupt incumbents (larger and well-established banks). To shed light on the innovations in BMs that have been initiated by digital banks to move away from traditional retail banking BM, seven digital BMs operating in the UK financial sector were examined using the BM innovation analysis framework. Our findings suggest that innovation in the new digital BMs has been achieved by building on the existing retail banking activities, developing new digitally enabled activities, and leveraging open innovation activities. Implications of our findings for researchers, managers and policy makers will be outlined.

Emerging Medical Body Area Networks (MBANs) require new, protected spectrum for clinical applications. This may mean uncoordinated and autonomous operation of multiple MBANs, within the new candidate bands. The question is that how will MBANs coexist as a secondary service with other radio systems? Clinical environment requires balance of robust and efficient wireless techniques to enable coexistence of MBANs and other radio devices where low transmission power MBANs as secondary systems may be vulnerable to interference from incumbent devices transceivers. Physical separation between the MBANs and incumbent radio devices and avoiding the transmission in the same frequency bands among the wireless techniques may be considered. In this paper, we propose interferencemanagement techniques considering such coexistencebetween the MBANs and other radio systems and deal withthe issue of co-existence with primary systems by proposing novel methods for a gateway-to-gateway coordination, to assist the methods described in the first and second part of this paper. Result is improved reliability and Quality of Service for MBANs. These would lead to multiple clinical benefits, including better patient mobility, more monitoring flexibility and extension of monitoring into care areas that are currently unmonitored. Reduced clinical errors and reduced overall monitoring costs are other results.

In the context of globalization, labor migration, trade and capital movements, tourism, foreign investment, IT are affected by the economic growth rates of countries. Periodic disclosure of reforms in the new Uzbekistan, the beginning of socio-economic relations provided opportunities for modernization, technical and technological re-equipment of the industrial sector. In particular, the need for financial technology in commercial banks is important to conduct research in this area. The influence of fintech is beginning to be felt in the banking sector and capital markets. This article surveys its development and its impact on efficiency, banking market structure, strategies of incumbents and entrants, and financial stability.

Technological innovation, recent regulatory initiatives and mass consumers’ changing expectations are quickly re-shaping the payments’ sector, paving the way to a more open environment where even non-banking players see a huge opportunity to gain momentum and disrupt the incumbents, namely the financial institutions. Fintech startups, high-tech firms but also mobile network operators are indeed challenging the status quo with their innovative propositions, trying to disintermediate banks from their traditional function of payment service providers. In the payments market, mobile wallets represent one of the innovations with highest potential of growth in the consumer-to-business segment. Payment market is a large and profitable segment for retail banking. Besides revenue streams from card payment transactions, new sources of revenueas and value creation have been unleashed by digital payments. This paper contributes to provide a better understanding of the mobile wallet ecosystem, also analyzing a set of four business cases so to identify potential sources of competitive advantage for retail banks in a market characterized by an increased non-bank competition. Mobile wallet platforms can be a powerful tool for banks to cope with the customer-centric approach. The structure of the paper analyse the recent trends in the financial services industry, involving the entry of new players (Fintech); the evolution of payments in the market; the concept of ecosystem applied to the new payment landscape; and it outlines the banks’ roles in the new mobile payment environment.

Frequency spectrum is a limited resource and the increasing demand caused by emerging services, augmented number of wireless users along with the demand for high-quality multimedia applications have resulted in the overcrowding of the allocated spectrum bands. The overcrowding of spectrum bands has exacerbated by the current spectrum licensing policy which has emerged as a bottleneck to efficient spectrum utilization, due to its inflexibility, resulting in most of the licensed spectrum being severely under-utilized. However, the problem of scarcity of spectrum bands and the inefficient utilization of the already allocated radio spectrum can be smartly addressed through spectrum sharing by enabling opportunistic usage of the underutilized frequency bands. One of the most exciting ways of spectrum sharing is cognitive radio technology which allows a wireless node to sense the environment, detect the network changes, and then make intelligent decisions by dynamically changing its reception or transmission parameters to communicate while ensuring that no interference is affected to the licensed users. It thus improves the spectrum utilization by reusing the unused or underutilized spectrum owned by the incumbent systems (primary systems). In this paper, a comprehensive survey and review of recent research about the advances in cognitive radio technology will be carried out. We will also evaluate the various spectrum sensing techniques in a cognitive radio network in the UHF/VHF bands allocated for TV broadcasting.

We examine a model of Cournot competition with congestion motivated by recent policy to allow commercial sharing of wireless spectrum that is assigned to other users such as government agencies. A key feature of such spectrum is that it is intermittently available because of the incumbent user’s activity. In our model, wireless service providers (SPs) compete for a common pool of customers using their own proprietary (exclusively licensed) bands of spectrum along with access to an additional intermittent band. When the intermittent band is unavailable, any traffic carried on that band must be shifted to the proprietary bands. Customers are sensitive to both the price they pay and the average congestion they experience across the bands of spectrum from which they receive service. We compare two different access policies for this intermittent band: one in which it is open to all SPs and one in which it is licensed to a single SP. We also allow the band to be divided into multiple subbands where each subband is either open or licensed. We characterize trade-offs between social welfare and consumer welfare that depend on the choice of different access policies and assignments of subbands to SPs. These can involve subtle issues related to the ability of a larger SP to make more efficient use of intermittent spectrum and the increase in competition by assigning more spectrum to smaller SPs. This paper was accepted by David Simchi-Levi, operations management.

This paper is based on a survey of UK firms making use of Electronic Data Interchange (EDI), and deals with the social and organizational consequences stemming from the adoption of these systems. It was found that a major factor impelling the adoption of EDI systems was pressure from major customers rather than a desire to streamline work organization. However, they do represent a capital intensification of work in the areas of purchasing and supply. This may ultimately erode the position of the less skilled incumbents of the lower job bands, standardizing functions, and, over the medium and long terms, may facilitate downsizing. It is concluded that, above all, EDI represents a strengthening of existing power relationships and imbalances between organizations, a process which opens up few opportunities for the empowerment of the rank-and-file within them.

In this paper, by exploiting the frequency-domain, we propose a countrywide millimeter-wave (mmWave) spectrum allocation and reuse technique to allocate and reuse spatially the countrywide 28 GHz licensed spectrum and 60 GHz unlicensed spectrum to small cells (SCs) on each floor of a building of each Fifth-Generation (5G) New Radio (NR) Mobile Network Operator (MNO) of an arbitrary country. We develop an interference management scheme, model user statistics per SC, and interferer statistics per apartment and formulate the amount of the 28 GHz and 60 GHz spectra per MNO. We derive average capacity, spectral efficiency (SE), energy efficiency (EE), and cost efficiency (CE) when employing the proposed technique, as well as the traditional static licensed spectrum allocation technique. We discuss the implementation of the proposed technique and evaluate the performance under two scenarios, namely, SCs operate only in the 28 GHz in scenario 1, and both 28 GHz and 60 GHz in scenario 2. Extensive results and analyses are carried out for four MNOs, i.e., MNOs 1, 2, 3, and 4, in scenario 1. However, in scenario 2, in addition to MNOs 1, 2, 3, and 4, an incumbent Wireless Gigabit (WiGig) operator is considered. It is shown that the proposed technique with no co-channel interference can improve average capacity, SE, EE, and CE of MNO 1 by 3 times, 1.65 times, 75%, and 60%, respectively, in scenario 1, whereas 6.12 times, 5.104 times, 85.8%, and 83.15%, respectively, in scenario 2. Moreover, with an increase in reuse factors, SE increases linearly and EE increases negative exponentially. Further, we show that the proposed technique can satisfy SE and EE requirements for sixth-generation (6G) mobile systems. Finally, we discuss offered benefits and point out key issues of the proposed technique for further studies.

The banking sector has begun a process of digital transformation that is changing the way financial products and services are sold. This transformation is a consequence of the growing demand for digital channels by some sectors of the population, the progress of new technologies and the banks’ need to improve efficiency after the economic crisis. The emergence of innovative financial technology (fintech) startups in the banking sector has been the lever initiating this digital transformation. Technology companies are challenging established banking business models and promoting the democratisation of finance in a more efficient and transparent financial ecosystem. Increasing investment in these technology companies has also attracted the interest of various regulators, and the future suggests a scenario of collaboration between these new players and traditional companies, with a consequently difficult task for the regulators of guaranteeing the same conditions of competition for new entrants and incumbents. However, technology companies with vast experience in the gathering and use of data from millions of users (such as Amazon, Google or Facebook) are considered a threat. Moreover, some types of evolving fintechs, such as neobanks with bank licences, may also become competitors. Distributed ledger technology (DLT) or blockchain, a fintech technology that is evolving constantly, has already awoken the interest of all financial sector participants because it could trigger real disruption and produce a new era of value.

The aim of this article is to investigate how an established firm in a dynamic market was able to successfully execute a corporate renewal programme in a hypercompetitive business environment. The study seeks to understand how market incumbents can transform themselves and outcompete younger, seemingly more entrepreneurial players. A longitudinal case study approach was used, following the extensive data collection in several periods between 2005 and 2013. Within this period, over 10 company visits were done to gain a first-hand knowledge of the transformation programme and to interview several senior executives and other stakeholders across the firm. In addition, relevant information from archival data and reports was collected during this period. Accelerated transformation requires taking calculated risks, redesigning the organization to align with the market, and making substantial investments in people. The study is limited to the transformation strategies adopted by a single company, FirstBank. While some of the lessons from this study can be applied to banks and other firms in transitional markets, certain factors idiosyncratic to the firm may make the universal adoption of their approach impossible. Many transformation initiatives tend to focus narrowly on technical, information technology (IT) issues, and leave out the so-called ‘soft issues’. From this case, transformation best works when process and structural transformation is complemented by radical changes in organization design and talent management systems.

This report presents an analytical framework for exploring the implications of Fintech innovations for incumbent banks and for provision of the financial safety net. The focus is on “digital banking initiatives”, that is, on Fintech initiatives that provide retail financial services akin to those traditionally provided by banks. Banks perform a wide range of functions for individual and institutional customers that help facilitate large-scale economic activity. In fact, in most economies the system of financial intermediation centres on banks and relies on their core products and services for financing of the economy and the maintenance of liquidity. On account of the central role banks play in the financial system, along with concerns about potential systemic instability linked to the riskiness of their activities, these institutions have long been regarded as “special”, as reflected in their prudential regulation and coverage under the various provisions of the financial safety net. Recent developments raise questions about the special status of banks. Two sets of questions are addressed herein: To what extent do new digital banking initiatives change the role that incumbent banks play in the financial system and the way that they perform their functions? To what extent are some of the new digital banking initiatives securing the benefits of the financial safety net without paying the commensurate price? To help address these questions the report first revisits the literature on core functions of the financial system to provide a framework for analysing recent developments. Particular attention is paid in this context to banks and their products and services. The “special” role of banks is discussed, which links to the provisions of the traditional safety net. These overview sections are followed by evidence on Fintech innovations that overlap the core banking products. Based on an examination of the characteristics of these new initiatives, the study then touches on the issue of whether banks are still special and whether some of these initiatives are or should be covered by financial safety net provisions.

Abstract We document a strong political cycle in bank credit and industry outcomes in Turkey. In line with theories of tactical redistribution, state-owned banks systematically adjust their lending around local elections compared with private banks in the same province based on electoral competition and political alignment of incumbent mayors. This effect only exists in corporate lending and creates credit constraints for firms in opposition areas, which suffer drops in assets, employment and sales but not firm entry. Financial resources and factors of production are misallocated as more efficient provinces and industries suffer the greatest constraints, reducing aggregate productivity.

The latest advancement in financial technology has posed unprecedented challenges for incumbent banks. This paper analyzes the implications of these challenges on bank competitveness, and explores the factors that could support digital advancement in banks. The analysis shows that the traditionally leading role of banks in advancing financial technology has diminished in recent years, and suggests that onoing efforts to catch up to the digital frontier could lead to a more concentrated banking industry, as smaller and less tech-savvy banks struggle to survive. Cross-country evidence has suggested that banks in high-income economies appear to have been the digital leaders, likely benefiting from a sound digital infrastructure, a strong legal and business environment, and healthy competition. Nonetheless, some digital leaders may fall behind in the coming years in adopting newer technologies due to entrenched consumer behavior favoring older technologies, less active fintech and bigtech companies, and weak bank balance sheets.

Abstract This article examines the effect of a new lender’s entry into a local mortgage market on the supply of new loans, housing prices and repossessions in areas around its branches. I use the decision of the European Commission to force the UK’s largest retail bank to divest a part of its business as a shock to the entry of a new lender, and show that incumbent banks increase mortgage lending in areas where the new bank has its branches. Furthermore, house prices increase by around 5% in the real estate market impacted by the shock. Average transaction numbers and mortgage repossession rates also increase in places where the new bank enters. Overall, my results show that increased competition in the banking market can have adverse consequences for risk-taking and financial stability.

River banks are characterised by dynamic environments that change in response to a variety of inputs. Bank erosion ordinarily means losses of bank materials and individual particles or aggregates by fluvial, sub-aerial and geo-tectonic processes. It is a common phenomenon of geomorphic hazard associated with flood plains and meandering or braided river system. The problem of bank erosion and shifting of the course of the river Ganga in certain C.D. blocks of Malda District is not purely an environment-related problem but a unique combination of both environment and ‘development’ project. The objective of the present paper is to measure the vulnerability of the villages that are situated adjacent to the Ganga River. Data was obtained from both primary as well as secondary sources. The primary data was collected through observation method and through informal interviews with the affected people. Secondary information was obtained from various research works encountered during the study. The study was framed on the lines of Pressure and Release (PAR) model developed by Wisner, Blaikie, Cannon and Davis (1994 & 2003). The inhabitants of these villages are facing serious problems related to employment, health, education, sanitation, drinking water supply and market due to the river bank erosion. In some areas people suffer from the irony of dual citizenship. No remedial measures are seriously taken by concerned authorities to solve this problem. Thus, it is incumbent on the part of the government and NGOs to devise corrective mechanism to curb the threat to the existence of the affected people as well as to improve their quality of life.

We consider revolutions and civil war involving an incumbent, a challenger, and the population. Revolutions are classified into eight outcomes. In four outcomes incumbent repression occurs (viewed as providing sub-threshold benefits such as public goods to the population). Accommodation occurs in the other four outcomes (benefits provision above a threshold). The incumbent and challenger fight each other. The incumbent may win and retain power or else lose, thereby causing standoff or coalition. In a standoff, which is costly, no one backs down and uncertainty exists about who is in power. In a coalition, which is less costly, the incumbent and challenger cooperate, compromise, and negotiate their differences. If the population successfully revolts against the incumbent, the challenger replaces the incumbent. Eighty-seven revolutions during 1961–2011, including the recent Arab spring revolutions, are classified into the eight outcomes. When repressive, the incumbent loses 46 revolutions, remains in power through 21 revolutions, and builds a coalition after 12 revolutions. When accommodative, the incumbent loses seven revolutions and builds a coalition after one revolution. The 87 revolutions are classified across geographic regions and by time-period.

This Radio Frequency (RF) dataset consists of synthetically generated waveforms of incumbent 3.5GHz radar systems. The intended use of the dataset is for developing and evaluating detectors for the 3.5GHz Citizens Broadband Radio Service (CBRS) \cite{cbrs} or similar bands where the primary users of the band are Federal radar systems. The dataset can be used for developing and testing radar detection algorithms using machine learning/deep learning techniques. The algorithm aims to detect whether the radar signal is present or absent regardless of the signal type. The target signals have a variety of modulation types and parameters chosen from wide ranges. In addition, the start time and the center frequency of the radar signals are randomized in the waveform. The variety of signals and their random parameters makes the detection problem more challenging when using non-naive (e.g., energy detector is a naive signal detector) classical signal processing techniques.

Abstract It has long been overlooked that factions of finance such as banks and insurers can have opposing policy interests. This paper is concerned with the preferences and strategies of private financial actors in the context of private prefunded pensions. To capture the “tug of war” among these actors, this paper identifies their different financial business models (insurance- and investment-orientation), political roles (financial incumbents and challengers), and levels at which infighting may occur (political and product-market level). For the German case, it shows that product-market competition among financial incumbents and challengers over retirement savings products only turned into competition politics during the 1990s, when shifting political winds provided an opening to insert path-shaping instruments in line with the program of finance capitalism. Financial actors’ preferences are not a derivative of economic or functional incentives, but socially embedded in that they are crucially shaped by interactions with their competitors and the political environment. The analysis disentangles the complex web of competition, cooperation, and ownership among factions of finance and discerns their genuine preferences from those strategically adjusted to context. This sheds doubt on functionalist explanations of (pension) financialization and enhances our understanding of how financial actors form and pursue their preferences.

Despite renewed interest in the role of business in shaping the welfare state, we still know little about how factions of capital adapt their strategies and translate these into political infighting and coalition building. Based on a detailed process tracing analysis of the political battle over German pension funds, this paper shows that cleavages within business do not necessarily run along the lines of finance vs. non-finance. While ‘financial challengers’ (banks and investment companies) advocated financialized pension funds, ‘financial incumbents’ (insurers) defended a conservative understanding of old age provision. Tremendous political momentum towards financialization notwithstanding, challengers remained largely unsuccessful. Incumbents elicited support from the wider business community by adjusting their strategic goals and engaging in discursive reformulations to effectively fight pension financialization from within capital. To accommodate such competition politics and coalition building, the paper argues for a more dynamic understanding of business strategizing and highlights the importance of discursive political strategies. It shows that some capitalists may act as antagonists of elements of financialization and problematizes the actual mechanisms of coalition building through which business plurality affects political outcomes.

This case features Stripe, a startup that enables merchants to accept payments from customers on the web, on mobile devices, and at the point of sale (POS). Stripe was launched in 2011 by the Collison brothers and quickly gained traction with e-commerce startups, particularly software and platform developers who needed help building their payment processing infrastructures. Stripe incurred high fixed costs in developing its platform and had low margins per transaction, so the company needed to reach high processing volumes (i.e., scale) to survive. This was challenging, as Stripe competed with large payment processors and traditional banks that had high processing volumes and were able to offer merchants significantly lower rates than Stripe. Still, merchants valued Stripe#x0027;s solution because it was simple and versatile. Students assume the role of the Collisons to think about possible strategies Stripe could pursue to process higher volumes of transactions. Students are challenged to think about the potential response of the incumbents to Stripe's different growth alternatives. The teaching note presents the Value Net framework and discusses the importance of considering complementors and their effect on a firm's strategy. Finally, a discussion about Stripe's potential entry into the Indian market allows students to apply the concepts they learned in the discussion of a new market.

Economics of Cute There are many ways to study cute: for example, neuro-biology (cute as adaptation); anthropology (cute in culture); political economy (cute industries, how cute exploits consumers); cultural studies (social construction of cute); media theory and politics (representation and identity of cute), and so on. What about economics? At first sight, this might point to a money-capitalism nexus (“the cute economy”), but I want to argue here that the economics of cute actually works through choice interacting with fixed costs and what economists call ”the substitution effect”. Cute, in conjunction with the Internet, affects the trade-offs involved in choices people make. Let me put that more starkly: cute shapes the economy. This can be illustrated with internet animals, which at the time of writing means Grumpy Cat. I want to explain how that mechanism works – but to do so I will need some abstraction. This is not difficult – a simple application of a well-known economics model, namely the Allen-Alchian theorem, or the “third law of demand”. But I am going to take some liberties in order to represent that model clearly in this short paper. Specifically, I will model just two extremes of quality (“opera” and “cat videos”) to represent end-points of a spectrum. I will also assume that the entire effect of the internet is to lower the cost of cat videos. Now obviously these are just simplifying assumptions “for the purpose of the model”. And the purpose of the model is to illuminate a further aspect of how we might understand cute, by using an economic model of choice and its consequences. This is a standard technique in economics, but not so in cultural studies, so I will endeavour to explain these moments as we go, so as to avoid any confusion about analytic intent. The purpose of this paper is to suggest a way that a simple economic model might be applied to augment the cultural study of cute by seeking to unpack its economic aspect. This can be elucidated by considering the rise of internet animals as a media-cultural force, as epitomized by “cat videos”. We can explain this through an application of price theory and the theory of demand that was first proposed by Armen Alchian and William Allen. They showed how an equal fixed cost that was imposed to both high-quality and low-quality goods alike caused a shift in consumption toward the higher-quality good, because it is now relatively cheaper. Alchian and Allen had in mind something like transport costs on agricultural goods (such as apples). But it is also true that the same effect works in reverse (Cowen), and the purpose of this paper is to develop that logic to contribute to explaining how certain structural shifts in production and consumption in digital media, particularly the rise of blog formats such as Tumblr, a primary supplier of kittens on the Internet, can be in part understood as a consequence of this economic mechanism. There are three key assumptions to build this argument. The first is that the cost of the internet is independent of what it carries. This is certainly true at the level of machine code, and largely true at higher levels. What might be judged aesthetically high quality or low quality content – say of a Bach cantata or a funny cat video – are treated the same way if they both have the same file size. This is a physical and computational aspect of net-neutrality. The internet – or digitization – functions as a fixed cost imposed regardless of what cultural quality is moving across it. Second, while there are costs to using the internet (for example, in hardware or concerning digital literacy) these costs are lower than previous analog forms of information and cultural production and dissemination. This is not an empirical claim, but a logical one (revealed preference): if it were not so, people would not have chosen it. The first two points – net neutrality and lowered cost – I want to take as working assumptions, although they can obviously be debated. But that is not the purpose of the paper, which is instead the third point – the “Alchian-Allen theorem”, or the third fundamental law of demand. The Alchian-Allen Theorem The Alchian-Allen theorem is an extension of the law of demand (Razzolini et al) to consider how the distribution of high quality and low quality substitutes of the same good (such as apples) is affected by the imposition of a fixed cost (such as transportation). It is also known as the “shipping the good apples out” theorem, after Borcherding and Silberberg explained why places that produce a lot of apples – such as Seattle in the US – often also have low supplies of high quality apples compared to places that do not produce apples, such as New York. The puzzle of “why can’t you get good apples in Seattle?” is a simple but clever application of price theory. When a place produces high quality and low quality items, it will be rational for those in faraway places to consume the high quality items, and it will be rational for the producers to ship them, leaving only the low quality items locally.Why? Assume preferences and incomes are the same everywhere and that transport cost is the same regardless of whether the item shipped is high or low quality. Both high quality and low quality apples are more expensive in New York compared to Seattle, but because the fixed transport cost applies to both the high quality apples are relatively less expensive. Rational consumers in New York will consume more high quality apples. This makes fewer available in Seattle.Figure 1: Change in consumption ratio after the imposition of a fixed cost to all apples Another example: Australians drink higher quality Californian wine than Californians, and vice versa, because it is only worth shipping the high quality wine out. A counter-argument is that learning effects dominate: with high quality local product, local consumers learn to appreciate quality, and have different preferences (Cowen and Tabarrok).The Alchian-Allen theorem applies to any fixed cost that applies generally. For example, consider illegal drugs (such as alcohol during the US prohibition, or marijuana or cocaine presently) and the implication of a fixed penalty – such as a fine, or prison sentence, which is like a cost – applied to trafficking or consumption. Alchian-Allen predicts a shift toward higher quality (or stronger) drugs, because with a fixed penalty and probability of getting caught, the relatively stronger substance is now relatively cheaper. Empirical work finds that this effect did occur during alcohol prohibition, and is currently occurring in narcotics (Thornton Economics of Prohibition, "Potency of illegal drugs").Another application proposed by Steven Cuellar uses Alchian-Allen to explain a well-known statistical phenomenon why women taking the contraceptive pill on average prefer “more masculine” men. This is once again a shift toward quality predicted on falling relative price based on a common ‘fixed price’ (taking the pill) of sexual activity. Jean Eid et al show that the result also applies to racehorses (the good horses get shipped out), and Staten and Umbeck show it applies to students – the good students go to faraway universities, and the good student in those places do the same. So that’s apples, drugs, sex and racehorses. What about the Internet and kittens?Allen-Alchian Explains Why the Internet Is Made of CatsIn analog days, before digitization and Internet, the transactions costs involved with various consumption items, whether commodities or media, meant that the Alchian-Allen effect pushed in the direction of higher quality, bundled product. Any additional fixed costs, such as higher transport costs, or taxes or duties, or transactions costs associated with search and coordination and payment, i.e. costs that affected all substitutes in the same way, would tend to make the higher quality item relatively less expensive, increasing its consumption.But digitisation and the Internet reverse the direction of these transactions costs. Rather than adding a fixed cost, such as transport costs, the various aspects of the digital revolution are equivalent to a fall in fixed costs, particularly access.These factors are not just one thing, but a suite of changes that add up to lowered transaction costs in the production, distribution and consumption of media, culture and games. These include: The internet and world-wide-web, and its unencumbered operation The growth and increasing efficacy of search technology Growth of universal broadband for fast, wide band-width access Growth of mobile access (through smartphones and other appliances) Growth of social media networks (Facebook, Twitter; Metcalfe’s law) Growth of developer and distribution platforms (iPhone, android, iTunes) Globally falling hardware and network access costs (Moore’s law) Growth of e-commerce (Ebay, Amazon, Etsy) and e-payments (paypal, bitcoin) Expansions of digital literacy and competence Creative commons These effects do not simply shift us down a demand curve for each given consumption item. This effect alone simply predicts that we consume more. But the Alchian-Allen effect makes a different prediction, namely that we consume not just more, but also different.These effects function to reduce the overall fixed costs or transactions costs associated with any consumption, sharing, or production of media, culture or games over the internet (or in digital form). With this overall fixed cost component now reduced, it represents a relatively larger decline in cost at the lower-quality, more bite-sized or unbundled end of the media goods spectrum. As such, this predicts a change in the composition of the overall consumption basket to reflect the changed relative prices that these above effects give rise to. See Figure 2 below (based on a blog post by James Oswald). The key to the economics of cute, in consequence of digitisation, is to follow through the qualitative change that, because of the Alchian-Allen effect, moves away from the high-quality, highly-bundled, high-value end of the media goods spectrum. The “pattern prediction” here is toward more, different, and lower quality: toward five minutes of “Internet animals”, rather than a full day at the zoo. Figure 2: Reducing transaction costs lowers the relative price of cat videos Consider five dimensions in which this more and different tendency plays out. Consumption These effects make digital and Internet-based consumption cheaper, shifting us down a demand curve, so we consume more. That’s the first law of demand in action: i.e. demand curves slope downwards. But a further effect – brilliantly set out in Cowen – is that we also consume lower-quality media. This is not a value judgment. These lower-quality media may well have much higher aesthetic value. They may be funnier, or more tragic and sublime; or faster, or not. This is not about absolute value; only about relative value. Digitization operating through Allen-Alchian skews consumption toward the lower quality ends in some dimensions: whether this is time, as in shorter – or cost, as in cheaper – or size, as in smaller – or transmission quality, as in gifs. This can also be seen as a form of unbundling, of dropping of dimensions that are not valued to create a simplified product.So we consume different, with higher variance. We sample more than we used to. This means that we explore a larger information world. Consumption is bite-sized and assorted. This tendency is evident in the rise of apps and in the proliferation of media forms and devices and the value of interoperability.ProductionAs consumption shifts (lower quality, greater variety), so must production. The production process has two phases: (1) figuring out what to do, or development; and (2) doing it, or making. The world of trade and globalization describes the latter part: namely efficient production. The main challenge is the world of innovation: the entrepreneurial and experimental world of figuring out what to do, and how. It is this second world that is radically transformed by implications of lowered transaction costs.One implication is growth of user-communities based around collaborative media projects (such as open source software) and community-based platforms or common pool resources for sharing knowledge, such as the “Maker movement” (Anderson 2012). This phenomenon of user-co-creation, or produsers, has been widely recognized as an important new phenomenon in the innovation and production process, particularly those processes associated with new digital technologies. There are numerous explanations for this, particularly around preferences for cooperation, community-building, social learning and reputational capital, and entrepreneurial expectations (Quiggin and Potts, Banks and Potts). Business Models The Alchian-Allen effect on consumption and production follows through to business models. A business model is a way of extracting value that represents some strategic equilibrium between market forms, organizational structures, technological possibilities and institutional framework and environmental conditions that manifests in entrepreneurial patterns of business strategy and particular patterns of investment and organization. The discovery of effective business models is a key process of market capitalist development and competition. The Alchian-Allen effect impacts on the space of effective viable business models. Business models that used to work will work less well, or not at all. And new business models will be required. It is a significant challenge to develop these “economic technologies”. Perhaps no less so than development of the physical technologies, new business models are produced through experimental trial and error. They cannot be known in advance or planned. But business models will change, which will affect not only the constellation of existing companies and the value propositions that underlie them, but also the broader specializations based on these in terms of skill sets held and developed by people, locations of businesses and people, and so on. New business models will emerge from a process of Schumpeterian creative destruction as it unfolds (Beinhocker). The large production, high development cost, proprietary intellectual property and systems based business model is not likely to survive, other than as niche areas. More experimental, discovery-focused, fast-development-then-scale-up based business models are more likely to fit the new ecology. Social Network Markets & Novelty Bundling MarketsThe growth of variety and diversity of choice that comes with this change in the way media is consumed to reflect a reallocation of consumption toward smaller more bite-sized, lower valued chunks (the Alchian-Allen effect) presents consumers with a problem, namely that they have to make more choices over novelty. Choice over novelty is difficult for consumers because it is experimental and potentially costly due to risk of mistakes (Earl), but it also presents entrepreneurs with an opportunity to seek to help solve that problem. The problem is a simple consequence of bounded rationality and time scarcity. It is equivalent to saying that the cost of choice rises monotonically with the number of choices, and that because there is no way to make a complete rational choice, agents will use decision or choice heuristics. These heuristics can be developed independently by the agents themselves through experience, or they can be copied or adopted from others (Earl and Potts). What Potts et al call “social network markets” and what Potts calls “novelty bundling markets” are both instances of the latter process of copying and adoption of decision rules. Social network markets occur when agents use a “copy the most common” or “copy the highest rank” meta-level decision rule (Bentley et al) to deal with uncertainty. Social network markets can be efficient aggregators of distributed information, but they can also be path-dependent, and usually lead to winner-take all situations and dynamics. These can result in huge pay-offs differentials between first and second or fifth place, even when the initial quality differentials are slight or random. Diversity, rapid experimentation, and “fast-failure” are likely to be effective strategies. It also points to the role of trust and reputation in using adopted decision rules and the information economics that underlies that: namely that specialization and trade applies to the production and consumption of information as well as commodities. Novelty bundling markets are an entrepreneurial response to this problem, and observable in a range of new media and creative industries contexts. These include arts, music or food festivals or fairs where entertainment and sociality is combined with low opportunity cost situations in which to try bundles of novelty and connect with experts. These are by agents who developed expert preferences through investment and experience in consumption of the particular segment or domain. They are expert consumers and are selling their “decision rules” and not just the product. The more production and consumption of media and digital information goods and services experiences the Alchian-Allen effect, the greater the importance of novelty bundling markets. Intellectual Property & Regulation A further implication is that rent-seeking solutions may also emerge. This can be seen in two dimensions; pursuit of intellectual property (Boldrin and Levine); and demand for regulations (Stigler). The Alchian-Allen induced shift will affect markets and business models (and firms), and because this will induce strategic defensive and aggressive responses from different organizations. Some organizations will seek to fight and adapt to this new world through innovative competition. Other firms will fight through political connections. Most incumbent firms will have substantial investments in IP or in the business model it supports. Yet the intellectual property model is optimized for high-quality large volume centralized production and global sales of undifferentiated product. Much industrial and labour regulation is built on that model. How governments support such industries is predicated on the stability of this model. The Alchian-Allen effect threatens to upset that model. Political pushback will invariably take the form of opposing most new business models and the new entrants they carry. Conclusion I have presented here a lesser-known but important theorem in applied microeconomics – the Alchian-Allen effect – and explain why its inverse is central to understanding the evolution of new media industries, and also why cute animals proliferate on the Internet. The theorem states that when a fixed cost is added to substitute goods, consumers will shift to the higher quality item (now relatively less expensive). The theorem also holds in reverse, when a fixed cost is removed from substitute items we expect a shift to lower quality consumption. The Internet has dramatically lowered fixed costs of access to media consumption, and various development platforms have similarly lowered the costs of production. Alchian-Allen predicts a shift to lower-quality, ”bittier” cuter consumption (Cowen). References Alchian, Arman, and William Allen. Exchange and Production. 2nd ed. Belmont, CA: Wadsworth, 1967. Anderson, Chris. Makers. New York: Crown Business, 2012. Banks, John, and Jason Potts. "Consumer Co-Creation in Online Games." New Media and Society 12.2 (2010): 253-70. Beinhocker, Eric. Origin of Wealth. Cambridge, Mass.: Harvard University Press, 2005. Bentley, R., et al. "Regular Rates of Popular Culture Change Reflect Random Copying." Evolution and Human Behavior 28 (2007): 151-158. Borcherding, Thomas, and Eugene Silberberg. "Shipping the Good Apples Out: The Alchian and Allen Theorem Reconsidered." Journal of Political Economy 86.1 (1978): 131-6. Cowen, Tyler. Create Your Own Economy. New York: Dutton, 2009. (Also published as The Age of the Infovore: Succeeding in the Information Economy. Penguin, 2010.) Cowen, Tyler, and Alexander Tabarrok. "Good Grapes and Bad Lobsters: The Alchian and Allen Theorem Revisited." Journal of Economic Inquiry 33.2 (1995): 253-6. Cuellar, Steven. "Sex, Drugs and the Alchian-Allen Theorem." Unpublished paper, 2005. 29 Apr. 2014 ‹http://www.sonoma.edu/users/c/cuellar/research/Sex-Drugs.pdf›.Earl, Peter. The Economic Imagination. Cheltenham: Harvester Wheatsheaf, 1986. Earl, Peter, and Jason Potts. "The Market for Preferences." Cambridge Journal of Economics 28 (2004): 619–33. Eid, Jean, Travis Ng, and Terence Tai-Leung Chong. "Shipping the Good Horses Out." Wworking paper, 2012. http://homes.chass.utoronto.ca/~ngkaho/Research/shippinghorses.pdf Potts, Jason, et al. "Social Network Markets: A New Definition of Creative Industries." Journal of Cultural Economics 32.3 (2008): 166-185. Quiggin, John, and Jason Potts. "Economics of Non-Market Innovation & Digital Literacy." Media International Australia 128 (2008): 144-50. Razzolini, Laura, William Shughart, and Robert Tollison. "On the Third Law of Demand." Economic Inquiry 41.2 (2003): 292–298. Staten, Michael, and John Umbeck. “Shipping the Good Students Out: The Effect of a Fixed Charge on Student Enrollments.” Journal of Economic Education 20.2 (1989): 165-171. Stigler, George. "The Theory of Economic Regulation." Bell Journal of Economics 2.1 (1971): 3-22. Thornton, Mark. The Economics of Prohibition. Salt Lake City: University of Utah Press, 1991.Thornton, Mark. "The Potency of Illegal Drugs." Journal of Drug Issues 28.3 (1998): 525-40.

The Australian Government has been actively evaluating how best to merge the functions of the Australian Communications Authority (ACA) and the Australian Broadcasting Authority (ABA) for around two years now. Broadly, the reason for this is an attempt to keep pace with the communications media transformations we reduce to the term “convergence.” Mounting pressure for restructuring is emerging as a site of turf contestation: the possibility of a regulatory “one-stop shop” for governments (and some industry players) is an end game of considerable force. But, from a public interest perspective, the case for a converged regulator needs to make sense to audiences using various media, as well as in terms of arguments about global, industrial, and technological change. This national debate about the institutional reshaping of media regulation is occurring within a wider global context of transformations in social, technological, and politico-economic frameworks of open capital and cultural markets, including the increasing prominence of international economic organisations, corporations, and Free Trade Agreements (FTAs). Although the recently concluded FTA with the US explicitly carves out a right for Australian Governments to make regulatory policy in relation to existing and new media, considerable uncertainty remains as to future regulatory arrangements. A key concern is how a right to intervene in cultural markets will be sustained in the face of cultural, politico-economic, and technological pressures that are reconfiguring creative industries on an international scale. While the right to intervene was retained for the audiovisual sector in the FTA, by contrast, it appears that comparable unilateral rights to intervene will not operate for telecommunications, e-commerce or intellectual property (DFAT). Blurring Boundaries A lack of certainty for audiences is a by-product of industry change, and further blurs regulatory boundaries: new digital media content and overlapping delivering technologies are already a reality for Australia’s media regulators. These hypothetical media usage scenarios indicate how confusion over the appropriate regulatory agency may arise: 1. playing electronic games that use racist language; 2. being subjected to deceptive or misleading pop-up advertising online 3. receiving messaged imagery on your mobile phone that offends, disturbs, or annoys; 4. watching a program like World Idol with SMS voting that subsequently raises charging or billing issues; or 5. watching a new “reality” TV program where products are being promoted with no explicit acknowledgement of the underlying commercial arrangements either during or at the end of the program. These are all instances where, theoretically, regulatory mechanisms are in place that allow individuals to complain and to seek some kind of redress as consumers and citizens. In the last scenario, in commercial television under the sector code, no clear-cut rules exist as to the precise form of the disclosure—as there is (from 2000) in commercial radio. It’s one of a number of issues the peak TV industry lobby Commercial TV Australia (CTVA) is considering in their review of the industry’s code of practice. CTVA have proposed an amendment to the code that will simply formalise the already existing practice . That is, commercial arrangements that assist in the making of a program should be acknowledged either during programs, or in their credits. In my view, this amendment doesn’t go far enough in post “cash for comment” mediascapes (Dwyer). Audiences have a right to expect that broadcasters, production companies and program celebrities are open and transparent with the Australian community about these kinds of arrangements. They need to be far more clearly signposted, and people better informed about their role. In the US, the “Commercial Alert” <http://www.commercialalert.org/> organisation has been lobbying the Federal Communications Commission and the Federal Trade Commission to achieve similar in-program “visual acknowledgements.” The ABA’s Commercial Radio Inquiry (“Cash-for-Comment”) found widespread systemic regulatory failure and introduced three new standards. On that basis, how could a “standstill” response by CTVA, constitute best practice for such a pervasive and influential medium as contemporary commercial television? The World Idol example may lead to confusion for some audiences, who are unsure whether the issues involved relate to broadcasting or telecommunications. In fact, it could be dealt with as a complaint to the Telecommunication Industry Ombudsman (TIO) under an ACA registered, but Australian Communications Industry Forum (ACIF) developed, code of practice. These kind of cross-platform issues may become more vexed in future years from an audience’s perspective, especially if reality formats using on-screen premium rate service numbers invite audiences to participate, by sending MMS (multimedia messaging services) images or short video grabs over wireless networks. The political and cultural implications of this kind of audience interaction, in terms of access, participation, and more generally the symbolic power of media, may perhaps even indicate a longer-term shift in relations with consumers and citizens. In the Internet example, the Australian Competition and Consumer Commission’s (ACCC) Internet advertising jurisdiction would apply—not the ABA’s “co-regulatory” Internet content regime as some may have thought. Although the ACCC deals with complaints relating to Internet advertising, there won’t be much traction for them in a more complex issue that also includes, say, racist or religious bigotry. The DVD example would probably fall between the remits of the Office of Film and Literature Classification’s (OFLC) new “convergent” Guidelines for the Classification of Film and Computer Games and race discrimination legislation administered by the Human Rights and Equal Opportunity Commission (HREOC). The OFLC’s National Classification Scheme is really geared to provide consumer advice on media products that contain sexual and violent imagery or coarse language, rather than issues of racist language. And it’s unlikely that a single person would have the locus standito even apply for a reclassification. It may fall within the jurisdiction of the HREOC depending on whether it was played in public or not. Even then it would probably be considered exempt on free speech grounds as an “artistic work.” Unsolicited, potentially illegal, content transmitted via mobile wireless devices, in particular 3G phones, provide another example of content that falls between the media regulation cracks. It illustrates a potential content policy “turf grab” too. Image-enabled mobile phones create a variety of novel issues for content producers, network operators, regulators, parents and viewers. There is no one government media authority or agency with a remit to deal with this issue. Although it has elements relating to the regulatory activities of the ACA, the ABA, the OFLC, the TIO, and TISSC, the combination of illegal or potentially prohibited content and its carriage over wireless networks positions it outside their current frameworks. The ACA may argue it should have responsibility for this kind of content since: it now enforces the recently enacted Commonwealth anti-Spam laws; has registered an industry code of practice for unsolicited content delivered over wireless networks; is seeking to include ‘adult’ content within premium rate service numbers, and, has been actively involved in consumer education for mobile telephony. It has also worked with TISSC and the ABA in relation to telephone sex information services over voice networks. On the other hand, the ABA would probably argue that it has the relevant expertise for regulating wirelessly transmitted image-content, arising from its experience of Internet and free and subscription TV industries, under co-regulatory codes of practice. The OFLC can also stake its claim for policy and compliance expertise, since the recently implemented Guidelines for Classification of Film and Computer Games were specifically developed to address issues of industry convergence. These Guidelines now underpin the regulation of content across the film, TV, video, subscription TV, computer games and Internet sectors. Reshaping Institutions Debates around the “merged regulator” concept have occurred on and off for at least a decade, with vested interests in agencies and the executive jockeying to stake claims over new turf. On several occasions the debate has been given renewed impetus in the context of ruling conservative parties’ mooted changes to the ownership and control regime. It’s tended to highlight demarcations of remit, informed as they are by historical and legal developments, and the gradual accretion of regulatory cultures. Now the key pressure points for regulatory change include the mere existence of already converged single regulatory structures in those countries with whom we tend to triangulate our policy comparisons—the US, the UK and Canada—increasingly in a context of debates concerning international trade agreements; and, overlaying this, new media formats and devices are complicating existing institutional arrangements and legal frameworks. The Department of Communications, Information Technology & the Arts’s (DCITA) review brief was initially framed as “options for reform in spectrum management,” but was then widened to include “new institutional arrangements” for a converged regulator, to deal with visual content in the latest generation of mobile telephony, and other image-enabled wireless devices (DCITA). No other regulatory agencies appear, at this point, to be actively on the Government’s radar screen (although they previously have been). Were the review to look more inclusively, the ACCC, the OFLC and the specialist telecommunications bodies, the TIO and the TISSC may also be drawn in. Current regulatory arrangements see the ACA delegate responsibility for broadcasting services bands of the radio frequency spectrum to the ABA. In fact, spectrum management is the turf least contested by the regulatory players themselves, although the “convergent regulator” issue provokes considerable angst among powerful incumbent media players. The consensus that exists at a regulatory level can be linked to the scientific convention that holds the radio frequency spectrum is a continuum of electromagnetic bands. In this view, it becomes artificial to sever broadcasting, as “broadcasting services bands” from the other remaining highly diverse communications uses, as occurred from 1992 when the Broadcasting Services Act was introduced. The prospect of new forms of spectrum charging is highly alarming for commercial broadcasters. In a joint submission to the DCITA review, the peak TV and radio industry lobby groups have indicated they will fight tooth and nail to resist new regulatory arrangements that would see a move away from the existing licence fee arrangements. These are paid as a sliding scale percentage of gross earnings that, it has been argued by Julian Thomas and Marion McCutcheon, “do not reflect the amount of spectrum used by a broadcaster, do not reflect the opportunity cost of using the spectrum, and do not provide an incentive for broadcasters to pursue more efficient ways of delivering their services” (6). An economic rationalist logic underpins pressure to modify the spectrum management (and charging) regime, and undoubtedly contributes to the commercial broadcasting industry’s general paranoia about reform. Total revenues collected by the ABA and the ACA between 1997 and 2002 were, respectively, $1423 million and $3644.7 million. Of these sums, using auction mechanisms, the ABA collected $391 million, while the ACA collected some $3 billion. The sale of spectrum that will be returned to the Commonwealth by television broadcasters when analog spectrum is eventually switched off, around the end of the decade, is a salivating prospect for Treasury officials. The large sums that have been successfully raised by the ACA boosts their position in planning discussions for the convergent media regulatory agency. The way in which media outlets and regulators respond to publics is an enduring question for a democratic polity, irrespective of how the product itself has been mediated and accessed. Media regulation and civic responsibility, including frameworks for negotiating consumer and citizen rights, are fundamental democratic rights (Keane; Tambini). The ABA’s Commercial Radio Inquiry (‘cash for comment’) has also reminded us that regulatory frameworks are important at the level of corporate conduct, as well as how they negotiate relations with specific media audiences (Johnson; Turner; Gordon-Smith). Building publicly meaningful regulatory frameworks will be demanding: relationships with audiences are often complex as people are constructed as both consumers and citizens, through marketised media regulation, institutions and more recently, through hybridising program formats (Murdock and Golding; Lumby and Probyn). In TV, we’ve seen the growth of infotainment formats blending entertainment and informational aspects of media consumption. At a deeper level, changes in the regulatory landscape are symptomatic of broader tectonic shifts in the discourses of governance in advanced information economies from the late 1980s onwards, where deregulatory agendas created an increasing reliance on free market, business-oriented solutions to regulation. “Co-regulation” and “self-regulation’ became the preferred mechanisms to more direct state control. Yet, curiously contradicting these market transformations, we continue to witness recurring instances of direct intervention on the basis of censorship rationales (Dwyer and Stockbridge). That digital media content is “converging” between different technologies and modes of delivery is the norm in “new media” regulatory rhetoric. Others critique “visions of techno-glory,” arguing instead for a view that sees fundamental continuities in media technologies (Winston). But the socio-cultural impacts of new media developments surround us: the introduction of multichannel digital and interactive TV (in free-to-air and subscription variants); broadband access in the office and home; wirelessly delivered content and mobility, and, as Jock Given notes, around the corner, there’s the possibility of “an Amazon.Com of movies-on-demand, with the local video and DVD store replaced by online access to a distant server” (90). Taking a longer view of media history, these changes can be seen to be embedded in the global (and local) “innovation frontier” of converging digital media content industries and its transforming modes of delivery and access technologies (QUT/CIRAC/Cutler & Co). The activities of regulatory agencies will continue to be a source of policy rivalry and turf contestation until such time as a convergent regulator is established to the satisfaction of key players. However, there are risks that the benefits of institutional reshaping will not be readily available for either audiences or industry. In the past, the idea that media power and responsibility ought to coexist has been recognised in both the regulation of the media by the state, and the field of communications media analysis (Curran and Seaton; Couldry). But for now, as media industries transform, whatever the eventual institutional configuration, the evolution of media power in neo-liberal market mediascapes will challenge the ongoing capacity for interventions by national governments and their agencies. Works Cited Australian Broadcasting Authority. Commercial Radio Inquiry: Final Report of the Australian Broadcasting Authority. Sydney: ABA, 2000. Australian Communications Information Forum. Industry Code: Short Message Service (SMS) Issues. Dec. 2002. 8 Mar. 2004 <http://www.acif.org.au/__data/page/3235/C580_Dec_2002_ACA.pdf >. Commercial Television Australia. Draft Commercial Television Industry Code of Practice. Aug. 2003. 8 Mar. 2004 <http://www.ctva.com.au/control.cfm?page=codereview&pageID=171&menucat=1.2.110.171&Level=3>. Couldry, Nick. The Place of Media Power: Pilgrims and Witnesses of the Media Age. London: Routledge, 2000. Curran, James, and Jean Seaton. Power without Responsibility: The Press, Broadcasting and New Media in Britain. 6th ed. London: Routledge, 2003. Dept. of Communication, Information Technology and the Arts. Options for Structural Reform in Spectrum Management. Canberra: DCITA, Aug. 2002. ---. Proposal for New Institutional Arrangements for the ACA and the ABA. Aug. 2003. 8 Mar. 2004 <http://www.dcita.gov.au/Article/0,,0_1-2_1-4_116552,00.php>. Dept. of Foreign Affairs and Trade. Australia-United States Free Trade Agreement. Feb. 2004. 8 Mar. 2004 <http://www.dfat.gov.au/trade/negotiations/us_fta/outcomes/11_audio_visual.php>. Dwyer, Tim. Submission to Commercial Television Australia’s Review of the Commercial Television Industry’s Code of Practice. Sept. 2003. Dwyer, Tim, and Sally Stockbridge. “Putting Violence to Work in New Media Policies: Trends in Australian Internet, Computer Game and Video Regulation.” New Media and Society 1.2 (1999): 227-49. Given, Jock. America’s Pie: Trade and Culture After 9/11. 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Thomas, Julian and Marion McCutcheon. “Is Broadcasting Special? Charging for Spectrum.” Conference paper. ABA conference, Canberra. May 2003. Turner, Graeme. “Talkback, Advertising and Journalism: A cautionary tale of self-regulated radio”. International Journal of Cultural Studies 3.2 (2000): 247-255. ---. “Reshaping Australian Institutions: Popular Culture, the Market and the Public Sphere.” Culture in Australia: Policies, Publics and Programs. Ed. Tony Bennett and David Carter. Melbourne: Cambridge UP, 2001. Winston, Brian. Media, Technology and Society: A History from the Telegraph to the Internet. London: Routledge, 1998. Web Links http://www.aba.gov.au http://www.aca.gov.au http://www.accc.gov.au http://www.acif.org.au http://www.adma.com.au http://www.ctva.com.au http://www.crtc.gc.ca http://www.dcita.com.au http://www.dfat.gov.au http://www.fcc.gov http://www.ippr.org.uk http://www.ofcom.org.uk http://www.oflc.gov.au Links http://www.commercialalert.org/ Citation reference for this article MLA Style Dwyer, Tim. "Transformations" M/C: A Journal of Media and Culture <http://www.media-culture.org.au/0403/06-transformations.php>. APA Style Dwyer, T. (2004, Mar17). Transformations. M/C: A Journal of Media and Culture, 7, <http://www.media-culture.org.au/0403/06-transformations.php>