Northwestern Events Calendar


Seminar in Macroeconomics

When: Monday, November 21, 2022
12:00 PM - 1:30 PM CT

Where: Kellogg Global Hub, 1410, 2211 Campus Drive, Evanston, IL 60208 map it

Audience: Faculty/Staff - Student - Post Docs/Docs - Graduate Students

Contact: Economics   (847) 491-8200

Group: Department of Economics: Seminar in Macroeconomics

Category: Academic


Fernando Alvarez (UChicago): "Strategic Complementarities in a Dynamic Model of Fintech Adoption" with Davide Argente, Francesco Lippi, Esteban Mendez, and Diana Van Patten

Abstract: "This paper develops a dynamic model of technology adoption featuring a network effect, in which the benefits for users increase with the number of adopters. We argue that such an effect is an inherent feature of several technologies, such as means of payments. We show that network effects give rise to multiple equilibrium paths, multiple steady states, and suboptimal allocations. The model generates slow adoption, as individuals optimally wait for others to adopt before doing so. We apply the theory to the adoption of SINPE, an electronic means of payment developed by the Central Bank of Costa Rica. Transaction-level data on the use of SINPE and a battery of administrative data sets on
the network structure allow us to document sizable network effects exploiting plausibly exogenous variation. A calibrated version of the model shows that the optimal subsidy pushes the economy to universal adoption."

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