This week’s New and Noteworthy highlights the power of heuristics in decision making, a theory on the future trajectory of Bitcoin as a global currency, and the economics of strengthening payments security.
- Antoinette Schoar of MIT’s Sloan School of Management and ideas42’s Saugato Datta released a new paper on using heuristics (or simple rules of thumb) to help individuals make “reasonably good decisions,” even in complex situations. The paper builds on Schoar et al.’s previous research that found evidence in the Dominican Republic that microentrepreneurs who received a rules of thumb business training curriculum fared better than those who participated in a more traditional accounting course.
- FAI Affiliate David Roodman has a new paper reflecting on the current state of the microfinance industry and where it can and should go next: Armageddon or Adolesence? Making Sense of Microfinance’s Recent Travails.
- In light of its recent customer information breach, Target leadership is calling on retailers and banks to strengthen credit card security by adopting a PIN credit card system, similar to what is used in Europe. However, The Washington Postexplores the economics behind digital payment systems in the US and argues that building a more secure payments system is not as easy (or as cheap) as one might expect.
- Social media sites like Facebook and China’s RenRen have a combined membership of almost 2 billion users worldwide – many of whom are in the developing world and might have profiles but no bank accounts. CGAP explores the potential of these sites to enter the money transfer sector and what that could mean for remittances.
- T-Mobile announced a new personal finance service that integrates a prepaid debit card, ATM access, and mobile banking – free for wireless subscribers and fee-based for all others.
- The New York Times featured an opinion piece on the impact of providing unconditional cash supplements to the poor. The author reviews a longitudinal study of a Cherokee community that divided profits from a casino to tribe members. The study found that income supplements had long-term mental health benefits, specifically for children and actually saved the community money over time.
- The most recent Pop Tech features various perspectives on financial inclusion, in the US, including thoughts from FAI’s Tim Ogden on the US Financial Diaries Project.
- Bitcoin is paradoxically one of the most publicized and least understood new technologies. Marc Andreessen explains Bitcoin, its potential as a digital currency, and why it matters for the future of online commerce.