30. September 9, 2015
31. September 10, 2015
32. September 22, 2015
33. October 22, 2015
34. October 30, 2015
35. November 19, 2015
36. November 23, 2015
37. December 3, 2015
38. December 10, 2015
39. December 22, 2015
- Speaker: Dr. Zhao, Xiaojian (Assistant Professor, Hongkong University of Science and Technology)
- Topic: An Economic Investigation of Linguistic Differences
- Time: 10:00-11:30 am
- Venue: B127, Liangsheng Building
- Abstract: The paper theoretically and experimentally explores how different language structures emerge in different environments. We propose a simple model in which environmental parameters vary with respect to the variability of relations and objects. Consistent with our theoretical results, the laboratory experiments show that languages emerging from an environment with more variable relations tend to use a limited set of symbols to represent relations, whereas languages emerging from an environment with more variable objects tend to discriminate among objects. The paper also experimentally examines whether language affects the way its speakers view the world, and thus revisits the Sapir-Whorf hypothesis in linguistics.
31. September 10, 2015
- Speaker: Dr. Chew, Soo Hong (Professor, National University of Singapore)
- Topic: Partial Ambiguity
- Time: 10:00-11:30 am
- Venue: B127, Liangsheng Building
- Abstract: The essence of the situation is action according to opinion, of greater or less foundation and value, neither entire ignorance nor complete and perfect information, but partial knowledge. -- Frank H. Knight (1921, p.199)
If two probabilities are equal in degree, ought we, in choosing our course of action, to prefer that one which is based on a greater body of knowledge?
-- John M. Keynes (1921, p.357)
Beyond pure risk and full ambiguity, we study experimentally attitude towards three forms of partial ambiguity. Interval ambiguity involves a symmetric range of possible compositions of red and black cards in a deck of 100 cards. Complementarily, disjoint ambiguity comprises two disjoint intervals of possible compositions. Two-point ambiguity involves either n or 100-n cards red with the rest black. Subjects exhibit a tight association between attitudes toward partial ambiguity and compound risk and are averse to increasing the number of possibilities in interval and disjoint ambiguity and compound risk. For two-point ambiguity and compound risk, subjects exhibit non-neutrality between subjective and objective stage-one priors. Our findings have rich implications on models of ambiguity and compound risk in the literature.
32. September 22, 2015
- Speaker: Zhang, Peng (Ph.D. Candidate, University of California, Santa Barbara)
- Topic: Temperature and Economic Growth: New Evidence from Total Factor Productivity
- Time: 10:00-11:30 am
- Venue: B127, Liangsheng Building
- Abstract: Understanding the relationship between temperature and economic growth is a critical component in designing optimal climate policies. This paper provides the first study that documents the relationship between daily temperature and total factor productivity (TFP). Using detailed firm-level production data from nearly two million observations in the Chinese manufacturing sector from 1998 to 2007, I find an inverted U-shaped relationship between daily temperature and TFP. By contrast, the effects of temperature on labor and capital inputs are limited. Moreover, the response function between daily temperature and output is almost identical with temperature and TFP, suggesting that reduction in TFP in response to high temperatures is the primary driver behind output losses. A medium-run climate prediction indicates that climate change will reduce TFP from 3.10 to 5.27%, and result in output losses from 4.51 to 6.91%. This corresponds to CNY 164.68-251.97 billion (USD 25.65-39.24 billion) losses in 2013 values. Given the invariance of TFP to the intensity of labor and capital inputs, Chinese manufacturing may be less likely to avoid climate damages simply by factor allocation. New innovations that expand the technology frontier for all inputs needs to occur to offset weather-driven TFP losses if other adaptation strategies are not feasible.
33. October 22, 2015
- Speaker: Dr. Yi, Ming (Assistant Professor, Huazhong University of Science and Technology)
- Topic: Dynamic Beauty Contests: Learning from the Winners to Win?
- Time: 15:30-17:00 pm
- Venue: B127, Liangsheng Building
- Abstract: I build a dynamic game consisting of a continuum of players to investigate the effects of previous winners' actions on the spreadings of subsequent players' actions. In each stage, besides the private signal, each player also observes actions taken by the winners of all previous stages as public signals. A unique equilibrium of the game is found and characterised. I then define variances of three forms of gap: variance of the gap between the average play and the underlying fundamental value, variance of the gap between a generic player's action and the average play, and the variance of the gap between a generic player's action and the winner's play. By checking their dynamics in the equilibrium, it is shown that the accumulation of private signals always reduces the first variance and the accumulation of the public signals always reduces the second variance. However, the accumulation of public signals reduces the first variance if and only if the public signals are sufficiently precise compared to the private ones, and the accumulation of private signals reduces the second variance if and only if the private signals are sufficiently precise compared to the public ones. I also show that the third variance is a weighted sum of the other two, which turns out to be useful in applications where the fundamental is unobservable. Finally, I conduct an empirical study on the twenty editions of the Miss Korea pageant during 1994-2013. I find a descending trend in the variance of the gap between the average face and the underlying ``true beauty'' face over these years. Moreover, this process is accompanied by ascending trends in the other two variances, indicating that contestants' faces have been converging to the ``true beauty'' overall but diverging from each other over the two decades.
34. October 30, 2015
- Speaker: Dr. Xiao, Mingjun (Assistant Professor, Wuhan University)
- Topic: Mechanism Design with Interdependent Valuations and Semi-exclusive SignalsMechanism Design with Interdependent Valuations and Semi-exclusive Signals
- Time: 14:00-15:30 pm
- Venue: B127, Liangsheng Building
- Abstract: This paper approaches the classic implementation problem with interdependent valuations in a new way. Instead of exploring conditions on preferences, we introduce a semi-exclusive information structure that can help implement efficient or inefficient social choice rule in generic environments. Semi-exclusive information allows agents to observe noisy signals about their opponents’ payoff types. This piece of information can provide a tool for the designer to verify other agents’ private information. Thanks to this tool, we could restore the implementation of efficiency that would not have been possible following the routine method of finding global or local sorting conditions. We study generic environments that include settings with preferences not satisfying “single crossing conditions,” or other similar sorting conditions. The role of semi-exclusive signal is targeted to align the incentive constraints. We explore the implementability of efficient rule and other properly specified rules both when this information structure is static and when it is dynamic. While both setups can implement general allocation rules, the static setting sheds light on Crémer and McLean (1985,1988)’s utilization of correlation and the dynamic setting steps away from Crémer and McLean’s world and explores the correlation after the allocation decisions.
35. November 19, 2015
- Speaker: Dr. Li, Yi (Assistant Professor, Zhongnan University of Economics and Law)
- Topic: Competing Eco-labels in a Product Duopoly
- Time: 15:00-16:30 pm
- Venue: B251, Liangsheng Building
- Abstract: I analyze green product market in which eco-label programs compete—programs certifying the environmental quality of the product to their respective standards. Specifically, I examine the strategic competition between an industry-sponsored program and a program sponsored by nongovernmental organization (NGO) in a duopoly product market. In particular, I analyze the effect of eco-label competition on private (consumer and producer surplus) and environmental benefits. I show that while environmental benefit is normally lower under competition than under the NGO-sponsored program alone, private benefit increases sufficiently so that social welfare may be improved.
36. November 23, 2015
- Speaker: Cheng, Lei (Ph.D. Candidate, University of California, Berkeley)
- Topic: Estimating the Value of Political Connections in China: Evidence from Sudden Deaths of Politically Connected Independent Directors
- Time: 10:00-11:30 am
- Venue: B251, Liangsheng Building
- Abstract: This paper uses the sudden deaths of retired government officials who were acting as independent directors of private firms to study the effects of losing political connections on the firm’s economic performance. Employing an event study, we find that, if a private firm loses political connections because of the sudden death of an independent director who was previously a government official, its stock price drops 1.47% on average within ten trading days. Moreover, after the sudden loss of political connections, there is a reduction in the economic benefits (e.g., bank loans, tax preference, and government subsidies) that a private firm can get from the government or banks, which provides a reasonable explanation for the negative stock price reaction. This paper also finds that, when a politically connected private firm unexpectedly loses its political connection, it increases investments in physical capital in order to regain its competitive advantage, which suggests that physical capital serves as a substitute for political capital.
37. December 3, 2015
- Speaker: Dr. Wang, Yonglei (Assistant Professor, Huazhong University of Science and Technology)
- Topic: Hurting without Hitting: The Economic Cost of Political Tension
- Time: 15:00-16:30 pm
- Venue: B127, Liangsheng Building
- Abstract: Political tension causing diplomatic strains rarely escalates into direct violence or war. This paper identifies the economic effects of such non-violent political tension by examining Taiwan’s sovereignty debate. Non- violent events harming the relationship with mainland China lead to an average daily drop of 200 basis points in Taiwanese stock returns. The impact is more severe on firms openly supporting the Taiwanese pro-independence party. Through a series of tests we identify this economic penalty as initiated by mainland authorities, who specifically target political opponents that are economically exposed to mainland China via either investments or exports.
38. December 10, 2015
- Speaker: Dr. Chen, Yu (Larry) (Assistant Professor, Nanjing University)
- Topic: Existence of Optimal Contracts with the Inclusion of Observable Actions in Generalized Moral Hazard Problems
- Time: 15:00-16:30 pm
- Venue: B127, Liangsheng Building
- Abstract: We provide a generalized model concerning the one-shot pure-strategy moral hazard contracting game with the inclusion of observable actions as well as unobservable actions. The outcome, action, and reward spaces are assumed to be all metrizable and compact and allowed to be uncountable and multi-dimensional. We find that employing observable-action-and-outcome-contingent contracts is strategically equivalent to employing pure outcome-contingent contracts, as long as the principal can specify and enforce individual rational observable actions to the agent. The space of feasible contracts is assumed to be (sequentially) closed under the topology of point-wise convergence. We do not need any other a priori technical assumptions on the contract function space. We then propose conditions under which the solution to such a principal-agent problem exists.
39. December 22, 2015
- Speaker: Dr. Yu, Li (Associate Professor, Central University of Finance and Economics)
- Topic: Supported or Supporting? Family Structure and Employment Choice of the Elderly in Urban China
- Time: 10:00-11:30 am
- Venue: B127, Liangsheng Building
- Abstract: We study labor supply of the elderly at retirement ages in conjunction with family size and financial transfer to children. Using 2011 CHARLS dataset, we find that parents with more children tend to choose to continue working even after being retired and provide financial support to their children. We find that ceteris paribus having an additional child significantly increases the probability of parents’ reemployment by 10%. There are heterogeneous effects of family size by child gender, marriage status and co-residency status. Elderly parents provide more support to children than vise versa, contrary to Chinese tradition of “raising children for the old age”.