Financial Advice in Canada: A Way Forward

Chuck Grace, Amelia Young, and Andrew Sarta with Romina Maurino

The very mention of robo-advisors seems to strike fear in the heart of the financial services industry, and comes with a popular narrative that suggests these are actual robots that not only look like humans, but are here for their jobs. There’s also a sense that these “machines” require science-fiction grade technology, which will be impossible to regulate.

The goal of this paper is to take stock of the current situation in Canada with regard to the digitization of advice
and start to define a way forward. We sought to move away from the misleading descriptor “robo-advice,” and
toward a new, more actionable model. It was our working assumption that there was room for all sides to come
together as the financial advice field evolved, and to create a digital structure that would make use of the best
both humans and machines had to offer. To further the discussion around digital advice and its role within the
wealth management industry, we also felt it was important to begin to build a framework for its execution.

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Buzz factor or innovation potential: What explains cryptocurrencies' returns?

2017. Buzz factor or innovation potential: What explains cryptocurrencies’ returns? PLoS ONE, 12(1): e0169556. doi:10.1371/journal.pone.0169556 (with S. Wang)

Cryptocurrencies have become increasingly popular since the introduction of bitcoin in 2009. In this paper, we identify factors associated with variations in cryptocurrencies’ market values. In the past, researchers argued that the “buzz” surrounding cryptocurrencies in online media explained their price variations. But this observation obfuscates the notion that cryptocurrencies, unlike fiat currencies, are technologies entailing a true innovation potential. By using, for the first time, a unique measure of innovation potential, we find that the latter is in fact the most important factor associated with increases in cryptocurrency returns. By contrast, we find that the buzz surrounding cryptocurrencies is negatively associated with returns after controlling for a variety of factors, such as supply growth and liquidity. Also interesting is our finding that a cryptocurrency’s association with fraudulent activity is not negatively associated with weekly returns—a result that further qualifies the media’s influence on cryptocurrencies. Finally, we find that an increase in supply is positively associated with weekly returns. Taken together, our findings show that cryptocurrencies do not behave like traditional currencies or commodities—unlike what most prior research has assumed—and depict an industry that is much more mature, and much less speculative, than has been implied by previous accounts.

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Categorical anarchy in the UK? British media’s classification of bitcoin and the limits of categorization

2017. Categorical anarchy in the U.K.? British media’s classification of bitcoin and the limits of categorization (with G. Swain). In Research in the Sociology of Organizations (From Categories to Categorization: Studies in Sociology, Organizations and Strategy at the Crossroads). Published online: 27 Mar 2017; 185-222

Bitcoin, introduced in 2009, is a complex entity whose evolving design and purpose are constantly redefined in a decentralized fashion. This makes bitcoin difficult to categorize, and indeed since 2009 bitcoin has been associated with 112 different labels in the British media alone (e.g., “private money”, “asset”, “commodity”) — most of which fail to adequately describe bitcoin. Contrary to expectations, the introduction of new labels meant to encapsulate bitcoin’s unique attributes is rare. By analyzing labels in 674 articles published in the U.K. between 2009 and 2015, we shed new light on the relationship between labeling and categorization, and explain the ongoing confusion faced by the media and their audiences when it comes to bitcoin. In particular, we identify classification inconsistencies at three levels (within clusters of labels, between labels and categories, and between label attributes), which hamper categorization based on attribute similarity, audience goals, and causal models (respectively). We contend that four contextual elements nurture this categorical anarchy: radical innovation, decentralization, nonintersection of knowledge domains, and absence of a superordinate category. We discuss implications for theory on categorization and innovation, and we conclude this paper with a call for more research on the socioeconomic revolution heralded by bitcoin and the blockchain.

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Bitcoin

2018. Bitcoin, in The Global Encyclopaedia of Informality, in Ledeneva A et al. (eds), The Global Encyclopaedia of Informality, London: UCL Press (with G. Swain)

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The internal and external governance of blockchain-based organizations: Evidence from cryptocurrencies

Forthcoming. The internal and external governance of blockchain-based organizations: Evidence from cryptocurrencies. In Campbell-Verduyn M (ed.), Bitcoin and Beyond: Blockchains and Global Governance. RIPE/Routledge Series in Global Political Economy (with YY Hsieh and S Wang)

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Media Naturalness and the Ability to Predict Generosity in a Give-Some – Get-Some Interaction

R E White, D J Neufeld & M Roghanizad

Are interactions using technology equivalent to interacting with another person face-to-face?  When it comes to assessing generosity and cooperativeness this research finds that interactions mediated by even high quality  video + audio are not as effective as face-to-face.  Completely replacing human interactions with technology may have a negative impact upon customer and other relationships.

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The cryptocurrency market: Survival of the fittest?

Y Hsieh & JP Vergne
Draft in preparation.

Independent of price fluctutations, some cryptocurrencies manage to thrive for years, whereas others disappear after a few months. What are the factors explaining cryptocurrency survival?