WORKING PAPERS

• “Coarse Information Design” [May, 2024] New Draft Alert!!!

  joint with Qianjun Lyu and Wing Suen

  The new version contains more results for general value functions and applications to coarse mechanism design.

  ABSTRACT: We study an information design problem with continuous state and discrete signal space. Under convex value functions, the optimal information structure is interval-partitional and exhibits a dual expectations property: each induced signal is the  conditional mean (taken under the prior density) of each interval; and each interval cutoff is the conditional mean (taken under the value function curvature) of the interval formed by neighboring signals.  This property enables an examination into which part of the state space is more finely partitioned. The analysis can be extended to general value functions and  adapted to study coarse mechanism design.

• “Consumers' Trust in Multi-attribute Experience-good Seller” [November, 2022]

  joint with Yuk-fai Fong, Ting Liu and Xiaoxuan Meng

  ABSTRACT: A monopolist sells experience goods with observable and experience attributes. The attributes are termed complements (substitutes) if increasing one attribute raises (lowers) the marginal value of the other. The equilibrium observable attribute increases (decreases) in the seller’s discount factor when the two attributes are complements(substitutes). For products with both experience attributes, turning one of them observable can lower the remaining experience attribute and the profit. Committing to myopically sub-optimal levels on the observable attribute can promote consumers’ trust and raise the profit. Our theory also suggests that an exogenously imposed minimum quality standard can undermine trust building when attributes are substitutes.

• “Label the Divorced: A Repeated-Game Analysis on (Re)Marriage Market” [November, 2022]

  joint with Yuk-fai Fong, Xiaoxiao Hu and Xiaoxuan Meng

  ABSTRACT: We study the marriage and remarriage market in a repeated-game framework with potentially alternating partners. We show that compared with a label-less society, introducing marital labels by a credible institution can effectively replace inefficient punishment by transferable punishment, therefore achieving efficiency improvement. With the presence of marital labels, the most preferred centralized matching protocol is to arrange as many bachelor-divorced marriage as possible. We also characterize equilibrium behavior for a decentralized society where marital status is either observable or unobservable at dating stage. Welfare comparison across social institutions with various degrees of labels transparency is conducted.

WORK IN PROGRESS

• “Monitoring Frequency and Project Turnover”

  joint with Qianjun Lyu and Wing Suen