78. May 22, 2017
77. May 15, 2017
76. May 8, 2017
75. April 25, 2017
74. April 20, 2017
73. April 10, 2017
72. April 6, 2017
71. March 30, 2017
70. March 24, 2017
69. March 23, 2017
68. March 20, 2017
67. March 16, 2017
66. March 10, 2017
65. March 9, 2017
64. February 24, 2017
63. January 10, 2017
- Speaker: Dr. Deng, Xiaohu (Assistant Professor, University of Tasmania)
- Title: Short Selling and Politically Motivated Negative Information Hoarding: Evidence from a Controlled Experiment
- Time: 10:00--11:30
- Venue: B251
- Abstract: Extant literature documents that managers have an incentive to hoard bad news due to political concerns. In this paper, we test the proposition that short selling has an attenuating effect on the politically motivated suppression of bad news. We examine the stock price behavior of Chinese public firms around two highly visible political events - meetings of the National Congress of the Chinese Communist Party and Two Sessions (The National People’s Congress Conference and The Chinese People’s Political Consultative Conference) from 2002-2014, and find that political bad news hoarding has been reduced after short selling becomes available. We establish causality by relying on a difference-in-differences approach based on a controlled experiment of short selling regulation changes in China. We also find this attenuating effect is more pronounced in firms with stronger political connection (higher state ownership and larger size) and higher accounting opacity, which further confirms our finding. This study sheds new light on the real effects of short sellers on political impact on capital market.
77. May 15, 2017
- Speaker: Dr. Feng, Zhigang (Assistant Professor, University of Nebraska, Omaha)
- Title: Regressive Subsidy to EHI and Entrepreneurial Talent Allocation
- Time: 14:00--15:30
- Venue: B127
- Abstract: Americans who obtain health insurance coverage through employment do not currently pay income or payroll taxes on this benefit. Tax-deductible employer-based health insurance (EHI) is regressive, and we show that this tax policy can help correct misallocation between self-employment and firm employment. Agents face idiosyncratic health risk and have heterogeneous ability as workers or entrepreneurs, and choose their occupation. Linking employment and health insurance creates a wedge between the marginal cost and benefit of EHI and employment at a firm. In equilibrium, some highly skilled individuals with adverse health shocks leave entrepreneurship while individuals with intermediate skills but favorable health shocks opt to manage firms. In the presence of imperfect information on private agent's health risk and managerial ability, and in the absence of perfectly discriminating taxes, a regressive tax subsidy for entrepreneurs to purchase health insurance helps correct distortions associated with non-contractible heterogeneity in managerial talent and health shocks. The subsidy makes entrepreneurship a more (less) attractive option for the highly (medium) skilled unhealthy (healthy) agents as such a policy increases (reduces) net-tax entrepreneurial income. Consequently, this tax policy provides an additional incentive (disincentive) for the first (second) type to be an entrepreneur, hence improving talent allocation. For a dynamic equilibrium model calibrated to the US economy, we find that the welfare gain from improved talent allocation outweighs the loss due to reduced risk sharing associated with the regressive subsidy.
76. May 8, 2017
- Speaker: Prof. Tang, Qianfeng (Associate Professor, Shanghai University of Finance and Economics)
- Title: Weak stability and Pareto efficiency in school choice
- Time: 15:30--17:00
- Venue: B127
- Chair: Dr. Sun, Xiang
- Abstract: We propose a new notion of weak stability for two-sided matching problems. A matching is said to be weakly stable if matching any of its blocking pairs inevitably creates new blocking pairs. We then apply this concept to school choice and study its compatibility with the Pareto efficiency of students’ welfare. Our main result shows that if a matching Pareto dominates the student-optimal stable matching for the students, then it is weakly stable if and only if it is more stable than the outcome of Kesten’s efficiency-adjusted deferred acceptance mechanism (EADAM) for some consenting constraint. We also provide a test for weak stability by showing that a matching is weakly stable if and only if it is as stable as the EADAM outcome which uses its set of blocking pairs as the consenting constraint.
75. April 25, 2017
- Speaker: Dr. Ou, Zhirong (Lecturer, Cardiff Business School, UK)
- Title: What determines China's housing price dynamics? New evidence from a DSGE-VAR
- Time: 15:30--17:00
- Venue: B127
- Abstract: We investigate what determines China's housing price dynamics using a DSGE-VAR estimated with priors allowing for the featured operating of normal and 'shadow' banks in China, with data observed between 2000 and 2014. We find that near 80% of the housing price fluctuation can be explained by the housing demand shock, which is also found to be the essential factor for housing price 'bubbles' to happen. We also find that a prosperous housing market could have implied future economic growth, but empirically the marginal impact is small. But this also means that, for policy-makers who wish to stabilise the housing market, the cost on output reduction would be quite limited.
74. April 20, 2017
- Speaker: Dr. Li, Xun (Assistant Professor, Wuhan University)
- Title: China's Vehicle Quota System and Consumer Choices of Automobile: A Perspective of Sunk Cost
- Time: 15:30--17:00
- Venue: Liangsheng Building B253
- Abstract: The effect of the vehicle quota system (VQS) in China such as Beijing's lottery system and Shanghai's auction system is under-analyzed. This paper analyzes the effects of VQS on consumer choices of automobile empirically and theoretically. Using a huge data set with more than 60 million observations, our empirical analysis based on the mixed logit model shows that Beijing's lottery system and Shanghai's auction system both stimulate consumers to purchase higher-price automobiles. However, different from Beijing, the effect of Shanghai's auction is dependent with individual income positively. We also propose a theoretical model extending Baliga and Ely (2011) to explain our empirical findings which is compatible for both the lottery and the auction systems. Our theoretical model consistently reveals the sunk cost in the lottery system in Beijing makes consumers prefer automobiles with higher price, while the impact of Shanghai's auction system is heterogeneous, depending on individual income.
73. April 10, 2017
- Speaker: Dr. Zheng, Jie (Assistant Professor, Tsinghua University)
- Title: Multi-period Matching with Commitment
- Time: 15:30--17:00
- Venue: Liangsheng Building B127
- Chair: Dr. Sun, Xiang
- Abstract: Many multi-period matching markets exhibit some level of commitment. That is, agents’ ability to terminate an existing relationship may be restricted by cost of breakups, binding contracts or social norms. This paper models matching markets with three types of commitment, defines corresponding notions of stability and examines the existence of stable mechanisms, as well as specifies sufficient conditions for efficiency, strategy-proofness and other properties. Firstly, the market with full commitment most closely resembles the static matching market, where most of the results, such as existence of stability, hold in the most general class of preferences. However, there is no dynamically stable spot rule, which only depends on spot markets, unless agents are extremely impatient. Secondly, for the models with two-sided commitment or one-sided commitment, desirable properties that are valid under the setup with a fixed set of individuals may not hold when arrivals and departures are introduced, and three approaches are proposed to deal with this issue. Whenever a dynamically stable matching exists, we construct an algorithm building upon the Deferred Acceptance algorithm of Gale and Shapley (1962) to characterize such a matching outcome. Moreover, as extensions, we discuss the case with no commitment and conduct welfare comparisons among cases with different types of commitment.
72. April 6, 2017
- Speaker: Prof. Liu, Qing (Professor, University of International Business and Economics)
- Title: Trade Policy Uncertainty and Innovation: Firm Level Evidence from China's WTO Accession
- Time: 10:00--11:30
- Venue: Liangsheng Building B127
- Abstract: Major trade liberalization episodes are often followed with a surge of innovations. This paper proposes a novel channel that trade may affect innovation: a major trade liberalization largely removes policy uncertainty in the destination market, and therefore encourages firms to invest in innovation. To verify this linkage, we adopt a difference-in-differences approach to examine the impact of a reduction in trade policy uncertainty (TPU), due to China's WTO accession in 2001, on firm innovation activities. We find that uncertainty reduction significantly encourages firms' patent applications: sectors with larger reduction in uncertainty led more patent applications after WTO accession. They also invest more in capital assets and import more foreign intermediate inputs.
71. March 30, 2017
- Speaker: Prof. Wang, Zhewei (Professor, Shandong University)
- Title: Multi-dimensional All-pay Contests
- Time: 15:30--17:00
- Venue:
- Chair: Dr. Sun, Xiang
- Abstract: Multi-dimensional contests refer to situations where players compete by exerting efforts in multiple dimension, which is commonplace in the real world. In a two-player two-dimension all-pay contest model, we derive and compare the optimal grand multi-dimensional contest and the optimal separate single-dimensional contests. We find that the former is preferred/indifferent to the latter for the contest designer when her payoff function takes a multiplicative/additive form. Intuitively, when the payoff function takes a multiplicative form, effort level in one dimension has an externality effect to the effectiveness of effort making in another dimension. In a grand two-dimensional contest each player bids efforts in two dimensions cooperatively where the externality effect is taken into consideration.
70. March 24, 2017
- Speaker: Prof. Chang, Jinyuan (Associate Professor, Southwestern University of Finance and Economics)
- Title: A Frequency Domain Analysis of High Frequency Financial Data
- Time: 15:30--17:00
- Venue: Liangsheng Building, B253
- Abstract: High frequency financial data are typically assumed to be an additive composite of a relatively slow-varying continuous-time stochastic process for the price and some measurement errors contaminating the observations. We propose new techniques for analyzing such noisy high frequency financial data, based on frequency domain methods which are extremely popular in simpler errors-in-variables problems for i.i.d. data. We propose to estimate the density function of the measurement error distribution by applying a deconvolution technique with appropriate localization, incorporating the slowly varying feature of the underlying stochastic process. Our analysis shows that the resulting density function estimator is consistent and minimax rate optimal. Estimators of moments of the error distributions and their properties are also investigated. With the estimated error density function, we further study a frequency domain estimator for integrated volatility of the stochastic price process. We show that our integrated volatility estimator achieves the optimal convergence rate when the financial data are contaminated with measurement errors. Numerical examples by simulations and a real data analysis are conducted to demonstrate and validate our analysis.
69. March 23, 2017
- Speaker: Prof. Zhang, Wenzhang (Associate Professor, Shanghai University of Finance and Economics)
- Title: Self-Evident Events and the Value of Linking
- Time: 13:00--14:30
- Venue: Liangsheng Building, B251
- Chair: Dr. Sun, Xiang
- Abstract: We propose a theory of linking in long-term relationships that is based on the notion of self-evident event, which describes what becomes "public" at the end of a stage game where players observe both public and private information. We obtain a tight bound on the average per-period efficiency loss that must be incurred to enforce a stage-game outcome throughout a T-period repeated game when T is large. Our results apply to all monitoring structures and strategy profiles. They explain the inefficiency result in Abreu, Milgrom, and Pearce (1991), as well as the approximate-efficiency results in Compte (1998), Obara (2009), and Chan and Zhang (2016).
68. March 20, 2017
- Speaker: Dr. Yang, Ming (Assistant Professor, Duke University)
- Title: Coordination and Continuous Choice
- Time: 10:00--10:30
- Venue: Liangsheng Building, B127
- Chair: Dr. Sun, Xiang
- Abstract: We study a coordination game where players choose what information to acquire about payoffs prior to the play of the game. We allow general information acquisition technologies, modeled by a cost functional defined on information structures. A cost functional satisfies continuous choice if players choose a continuous decision rule even in a decision problem with discontinuous payoffs. If continuous choice holds, there is a unique equilibrium; if it fails, there are multiple equilibria. We show how continuous choice captures the idea that it is sufficiently harder to distinguish states that are close to each other relative to far away states.
67. March 16, 2017
- Speaker: Prof. Jason Shachat (Professor, Durham University)
- Title: How do auctioneers set ex ante and ex post reserve prices? An experimental study
- Time: 16:00--17:30
- Venue: Liangsheng Building, B127
- Abstract: We provide the direct experimental comparison of auctioneer behaviour in English auctions with a reserve price and the English auctions with renegotiation, two popular methods of procurement. In our experiment, the auctioneers in these two mechanisms demonstrate systematic biases relative theoretical predictions. We find a model of subjective conditional probability judgements explains the biases shown in the two mechanisms. Auctioneers choose reserve prices consistent with maximization of an expected utility model with transformed conditional probability of executing reserve prices, while they choose take-it-or-leave offers as though they distort Bayesian posterior probabilities of executing offers. To demonstrate the robustness of our model, especially relative to standard models and those of anticipated regret we then show in a subsequent experiment that the auctioneer's expected benefit is predicted well out of sample in an environment in which the distribution of seller's cost is right skewed.
66. March 10, 2017
- Speaker: Dr. Nie, Jun (Senior Economist, Federal Reserve Bank of Kansas City)
- Title: The Negative Growth-Volatility Relationship and the Gains from Financial Integration
- Time: 14:30--16:00
- Venue: Liangsheng Building, B127
- Abstract: We document a negative relationship between average growth and volatility in a cross-section of countries. We then provide an interpretation of this result using a robustness (RB) version of the Obstfeld (1994) model of financial diversification and openness. Incorporating a preference for robustness can generate the observed negative relationship between growth and volatility of real GDP. Furthermore, we show that RB reduces the expected growth rate in a diversified equilibrium (positive holdings of risk-free capital), while it could increase growth in an undiversified equilibrium. Using this framework, we calculate the growth and welfare gains associated with financial market openness, and show that international integration has a smaller effect on welfare gain under RB if the economy is in a diversified equilibrium.
65. March 9, 2017
- Speaker: Dr. Sun, Yifei (Assistant Professor, University of International Business and Economics)
- Title: Maskin Meets Abreu and Matsushima
- Time: 15:30--17:00
- Venue: Liangsheng Building, B127
- Chair: Dr. Sun, Xiang
- Abstract: Maskin (1977, 1999) proposes a well known monotonicity condition, which we refer to as Maskin monotonicity and shows it to be necessary and almost sufficient for Nash implementation. Although many implementation results using refinements of Nash equilibrium can dispense with Maskin monotonicity, a recent development in the literature shows that if we were to make implementation robust to information perturbations, Maskin monotonicity would come back as a necessary condition. Looking at environments with monetary transfers and quasiliner preferences, we show that Maskin monotonicity is not only necessary but sufficient for Nash implementation by finite mechanisms. It is easy to see that finite mechanisms are robust to information perturbations. To obtain this result, we construct a novel finite mechanism that exploits the notion of dictator lotteries of Abreu and Matsushima (1992) and we apply it to Nash implementation. Our mechanism does not use the integer games or anything alike and takes care of mixed strategies explicitly. We also extend our result to the case of social choice correspondences, two agents, and rationalizable implementation of social choice functions.
64. February 24, 2017
- Speaker: Prof. Chew, Soo Hong (Professor, National University of Singapore)
- Title: Haze and Decision Making: A Natural-Laboratory Experiment
- Time: 14:00--16:30
- Venue: Liangsheng Building, B127
- Abstract: The adverse impact of haze on both short term and longer term health and related economic outcomes has received increasing attention in the media. This paper is a first attempt at investigating the causal effect of haze directly on decision making in a natural laboratory experiment in Beijing over five days in October 2012 with highly varying levels of Particulate Matters 2.5, before this measure became commonly used in China the next year. An increase in the level of haze increases the degree of risk aversion elicited from a portfolio choice task and the degree of ambiguity aversion when facing gain oriented uncertainty as well as the degree of risk seeking behavior for even-chance risk over losses. This in turn implies a greater tendency towards the disposition effect in investor behavior. Additionally, in temporal decision making, subjects are more impatient when discounting over a remote comparison, but not for tradeoffs over the near term. Moreover, subjects exhibit a diminished winning motive in the second-price auction, greater departure from optimal behavior in the p-Beauty game, more selfishness in the dictator game, greater inequity aversion in the ultimatum game, and less cooperativeness in the prisoner dilemma game. Overall, our results point to a haze-brain-decision pathway as foundation for several recent findings linking haze to short term economic outcomes including productivity, crime, and stock market.
63. January 10, 2017
- Speaker: Miss. Zhang, Xue (Ph.D. Candidate, The University of Adelaide)
- Title: CHEAP TALK DELEGATION EXPERIMENTS
- Time: 10:00--11:30
- Venue: Liangsheng Building
- Abstract: We study experimentally how informative cheap talk is in a delegation game where the interests of the delegator and the delegatees are not aligned and information is asymmetric. Further we ask how much efficiency gain can be achieved in delegation by cheap talk. This paper contributes to the cheap talk literature by a novel delegation scenario to study how the form of cheap talk can affect information transmission. We design a one-shot tailored three-person delegation game based on a real effort task. Two players can simultaneously send a costless message about their performance along with their avatar to a delegator. If the task is delegated, a bonus is transferred from the delegator to the chosen player. The realistic performance context and the avatar element permit us to study the social dimension inquiry like gender gap and reciprocity. To explore the role of cheap talk, we vary the form of message space. We start by a structured massage space which consists of integers to represent how good the performances are (i.e. Precise Message Treatment). Next we introduce noise by partitioning the massage space into intervals (i.e. Fussy Message Treatment). Lastly we allow free text communication to allow the size of the massage space to be effectively unbounded (i.e. Free Communication Treatment). In line with the literature of lie aversion, truthful reports are observed in messages across all treatments. Our data provide further evidence to explain the lie aversion by other-regarding preference in FMT. Surprisingly we find that delegators disregard messages in PMT but respond to favourable messages by increasing chance of delegation in FMT and FCT. Compared to no delegation scenario our cheap talk delegation options can improve the social welfare to a certain degree. The most efficient outcome is obtained in FMT where players can express freely how competent they are and delegators pick up the right cue.