文字材料 Program and Abstractseconen.shufe.edu.cn/_upload/article/files/c1/b4/da6c...6th Shanghai Microeconomics Workshop 1 Program June 12, 2015, Friday 6:30 pm Welcome Dinner,

6th Shanghai Microeconomics Workshop

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Program

June 12, 2015, Friday

6:30 pm Welcome Dinner, 2nd floor, Howard Johnson Caida Plaza

June 13, 2015, Saturday 8:20 am – 8:40 am Opening Ceremony (Guoqiang Tian), Room 511, School of Economics, SUFE

8:40 am – 9:00 am Group Photo

Session 1 (Chair: Yongchao Zhang), Room 807, School of Economics, SUFE

9:00 am – 9:45 am Yuxin Chen, New York University Shanghai

“Sequential Search with Refinement: Model and Application with

Click‐stream Data” (with Song Yao)

9:45 am – 10:30 am Jun Yu, Shanghai University of Finance and Economics

“Consumer Search with Price Sorting”

10:30 am – 11:00 am Tea Break

11:00 am – 11:45 am Alessandro Pavan, Northwestern University

“Platform Pricing under Dispersed Information” (with Bruno Jullien)

11:45 am – 12:30 pm Junjie Zhou, Shanghai University of Finance and Economics

“Platform Competition in Multi‐sided Markets” (with Guofu Tan)

12:30 pm – 2:30 pm Lunch


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Session 2 (Chair: Bingyong Zheng), Room 807, School of Economics, SUFE

2:30 pm – 3:15 pm Atsushi Kajii, Kyoto University

“On Continuity of Robust Equilibria” (with Ori Haimanko)

3:15 pm – 4:00 pm Jingfeng Lu, National University of Singapore

“Effort‐Maximizing Contingent Prize Allocation Rule in Three‐Battle

Contests” (with Xin Feng)

4:00 pm – 4:20 pm Tea Break

4:20 pm – 5:05 pm Fei Li, University of North Carolina‐Chapel Hill

“Revenue Management Without Commitment: Dynamic Pricing and

Periodic Fire Sales” (with Francesc Dilme)

5:30 pm Dinner

June 14, 2015, Sunday Session 3 (Chair: Qianfeng Tang), Room 807, School of Economics, SUFE

9:00 am – 9:45 am Hulya Eraslan, Rice University

“Uniqueness of Stationary Equilibrium Payoffs in Coalitional Bargaining

Among Risk Averse Players”

9:45 am – 10:30 pm Sambuddha Ghosh, Shanghai University of Finance and Economics

“Repeated Competing Mechanisms” (with Seungjin Han)

10:30 am – 11:00 am Tea break

11:00 am – 11:45 am Yeon‐Koo Che, Columbia University

“Optimal Design for Social Learning” (with Johannes Horner)

11:45 am – 12:30 pm Pak‐Hung Au, Nanyang Technological University

“Pay to Quit and Team Incentives”


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12:15 pm – 2:30 pm Lunch

Session 4 (Chair: Kang Rong), Room 807, School of Economics, SUFE

2:30 pm – 3:15 pm Marciano Siniscalchi, Northwestern University

“Sequential Preferences and Sequential Rationality”

3:15 pm – 4:00 pm Jian Li, McGill University

“Blackwell’s Informativeness Ranking with Uncertainty Averse Preferences”

(with Junjie Zhou)

4:00 pm – 4:20 pm Tea Break

4:20 pm – 5:05 pm Adam Wong, Shanghai University of Finance and Economics

“Nonlinear Pricing with Asymmetric Competition” (with Yong Chao and

Guofu Tan)

5:30 pm Dinner


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Map: Howard Johnson Hotel to School of Economics (SOE), about 0.3km

Map: Baolong Hotel to School of Economics (SOE), about 1.5km


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Abstracts

June 13th, 2015, Saturday

Session 1 (9:00 am – 12:30 pm; Chair: Yongchao Zhang), Room 807, School of Economics,

SUFE

9:00 am – 9:45 am, Yuxin Chen, New York University Shanghai

“Sequential Search with Refinement: Model and Application with Click-stream Data” (with

Song Yao)

Abstract:

We propose a structural model of consumer sequential search under uncertainty about attribute

levels of products. Our identification of the search model relies on exclusion restriction variables

that separate consumer utility and search cost. Because such exclusion restrictions are often

available in online click-stream data, the identification and corresponding estimation strategy is

generalizable for many online shopping websites where such data can be easily collected.

Furthermore, one important feature of online search technology is that it gives consumers the

ability to refine search results using tools such as sorting and filtering based on product attributes.

The proposed model can integrate consumers’ decisions of search and refinement. The model is

instantiated using consumer click-stream data of online hotel bookings provided by a travel

website. The results show that refinement tools have significant effects on consumer behavior

and market structure. We find that the refinement tools encourage 33% more searches and

enhance the utility of purchased products by 17%. Most websites by default rank search results

according to their qualities or relevance to consumers (e.g., Google). When consumers are

unaware of such default ranking rules, they may engage in disproportionately more searches

using refinement tools. Consequently, overall consumer surplus may deteriorate when search

cost outweighs the enhanced utility. In contrast, if the website simply informs consumers that the

default ranking already reflects product quality or relevance, consumers search less and their

surplus improves. We also find that refinement tools lead to a less concentrated market structure.

9:45 am – 10:30 am, Jun Yu, Shanghai University of Finance and Economics


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“Consumer Search with Price Sorting”

Abstract:

This paper introduces price sorting into a consumer search model. Either ascending or

descending price sorting can be applied before the sampling process. Consumers search

sequentially for products with two types of qualities. We allow a fraction of consumers to have

zero search costs, and all other consumers have the same positive search cost. Price dispersion

exists in the unique symmetric equilibrium. We find that, when the search cost is small, using

price sorting will improve both total welfare and consumer surplus, but have no impact on

industry profits. Moreover, if consumers can choose the type of price sorting for their own

interests, ascending price sorting (or descending price sorting, respectively) will be chosen if

there are more high-quality products (or low-quality products, respectively) in the market.

11:00 am – 11:45 am, Alessandro Pavan, Northwestern University

“Platform Pricing under Dispersed Information” (with Bruno Jullien)

Abstract:

We study monopoly and duopoly pricing in a two-sided market with dispersed information

about users’ preferences. First, we show how the dispersion of information introduces

idiosyncratic uncertainty about participation rates and how the latter shapes the elasticity of the

demands and thereby the equilibrium prices. We then study informative advertising campaigns

affecting the agents’ ability to estimate their own as well as other agents’ valuations, and product

design affecting the distribution of valuations on the two sides of the market.

11:45 am – 12:30 pm, Junjie Zhou, Shanghai University of Finance and Economics

“Platform Competition in Multi-sided Markets” (with Guofu Tan)

Abstract:

This paper provides a general model of platform competition allowing for more than two

platforms, more than two sides/groups and discrete choices of agents. We develop analytical

tools to analyze this general model (existence and uniqueness of participation equilibrium and


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comparative statics). In the symmetric model, we derive a simple equilibrium pricing rule:

price equals cost plus market power distortion minus cross subsidies. Group-specific price

accounts for different degree of total externalities of a group on all the other groups. Both market

power distortion and cross subsidies are decreasing in the number of platform. The net effect

depends on the degree of product differentiation and the size of externalities. Also we provide

comparative static analysis with respect to number of sides, number of platforms and different

noise distributions.

Session 2 (2:30 pm – 5:05 pm; Chair: Bingyong Zheng), Room 807, School of Economics,

SUFE

2:30 pm – 3:15 pm, Atsushi Kajii, Kyoto University

“On Continuity of Robust Equilibria” (with Ori Haimanko)

Abstract:

We relax the Kajii and Morris (1997a) notion of equilibrium robustness by allowing approximate

equilibria when information in a game becomes incomplete. The new notion is termed

"approximate robustness". The approximately robust equilibrium correspondence turns out to be

upper hemicontinuous, unlike the (exactly) robust equilibrium correspondence. Another

distinction comes to light when we show that, as a corollary of upper hemicontinuity,

approximately robust equilibria exist in all zero-sum games. Thus, although approximate

robustness is only a small variation of the original notion, it is strictly weaker than the latter, and

its adoption enriches the domain of games for which robust equilibria exist.

3:15 pm – 4:00 pm, Jingfeng Lu, National University of Singapore

“Effort-Maximizing Contingent Prize Allocation Rule in Three-Battle Contests” (with Xin Feng)

Abstract:

This paper studies the effort-maximizing prize allocation rules in sequentially played three-battle

contests. The organizer has a fixed prize budget, and rewards the players contingent on the

number of battles they win. The battles are played between two opposing players or between

selected pairs of players from two opposing teams. A full spectrum of contest technologies in the


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Tullock family is accommodated. We find a winner-take-all best-of-three contest is optimal for

team competitions. For competitions between two individuals, the optimal design varies with the

contest technology: when the discriminatory power is within the low range, a winner-take-all

best-of-three contest remains optimal; when the discriminatory power falls in the intermediate

and high ranges, the optimal design takes a form of best-of-three contest with both a contest

prize to the grand winner of the whole contest and uniform battle prizes to battle winners. For

intermediate range, the battle prize increases with the discriminatory power but never goes

beyond one-third of the total prize. For the high range, interestingly, a wide span of battle prizes

ranging from zero to one-third of the total prize is optimal. Therefore, in general additional

award should be allocated to the grand winner of the whole contest. Our findings thus rationalize

the commonly observed winner-take-all prize structure as well as intermediate prizes in

sequential multi-battle contests.

4:20 pm – 5:05 pm, Fei Li, University of North Carolina-Chapel Hill

“Revenue Management Without Commitment: Dynamic Pricing and Periodic Fire Sales” (with

Francesc Dilme)

Abstract:

We consider a market with a profit-maximizing monopolist seller who has K identical goods to

sell before a deadline. At each point of time, the seller posts a price and the quantity available but

cannot commit to future offers. Over time, potential buyers with different reservation values

enter the market. Buyers strategically time their purchases, trading off (1) the current price

without competition and (2) a possibly lower price in the future with the risk of being rationed.

We analyze equilibrium price paths and buyers’ purchases behavior in which prices decline

smoothly over the time period between sales and jump up immediately after a transaction occurs.

In equilibrium, high-value buyers purchasing on arrival. Crucially, the seller may periodically

liquidate part of his stock via fire sales before the deadline in order to secure a higher price in the

future. Intuitively, these sales allow the seller to ‘commit’ to high prices going forward. The

possibility of fire sales before the deadline implies that the allocation may be inefficient. The

inefficiency arises from the scarce good being misallocated to low-value buyers, rather than the

withholding inefficiency that is normally seen with a monopolist seller.


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June 15th, 2014, Sunday

Session 3 (9:00 am – 12:30 pm; Chair: Qianfeng Tang), Room 807, School of Economics,

Shanghai University of Finance and Economics

9:00 am – 9:45 am, Hulya Eranslan, Rice University

“Uniqueness of Stationary Equilibrium Payoffs in Coalitional Bargaining Among Risk Averse

Players”

Abstract:

We study a model of sequential bargaining in which, in each period before an agreement is

reached, the proposer’s identity is randomly determined, the proposer suggests a division of a pie

of size one, each other agent either approves or rejects the proposal, and the proposal is

implemented if the number of approving agents exceeds a threshold, and the agents have

concave utilities. We show that the stationary equilibrium expected payoffs of this bargaining

game are unique.

9:45 am – 10:30 pm, Sambuddha Ghosh, Shanghai University of Finance and Economics

“Repeated Competing Mechanisms” (with Seungjin Han)

Abstract:

This paper studies the repeated game where multiple principals compete to offer short-term

mechanisms to multiple agents repeatedly over time. A mechanism is sufficiently general to

make a principal's short-term action contingent on agents' messages that may reflect changes in

the market or agents' payoff types. In the case with no private information about agents' types,

there is no distinction between the repeated and one-shot game in terms of set of equilibrium

allocations: A principal's lower-bound of equilibrium payoffs is expressed as his maxmin value

over action space in both games.

In the case with private information about agents' types, there are significant differences. In the

repeated game, a weaker notion of incentive compatibility can be applied and the deviating

principal cannot do any better with offering an arbitrary mechanism off the path following his

deviation than he does with offering a single action. In contrast to the one-shot game, this allows


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us to express a principal's lower-bound of equilibrium payoff in the repeated game in terms of

model primitives: It is equal to his maxmin value over his action space and the other principals'

incentive compatible direct mechanisms conditional on the principal's action. This lower-bound

is lower than that in the one-shot setting. This and the weaker notion of incentive compatibility

imply that the repeated game supports more allocations in equilibrium.

11:00 am – 11:45 am, Yeon-Koo Che, Columbia University

“Optimal Design for Social Learning” (with Johannes Horner)

Abstract:

This paper studies the design of a recommender system for organizing social learning on a

product. To improve incentives for early experimentation, the optimal design trades off fully

transparent social learning by over-recommending a product (or “spamming”) to a fraction of

agents in the early phase of the product cycle. Under the optimal scheme, the designer spams

very little about a product right after its release but gradually increases the frequency of

spamming and stops it altogether when the product is deemed sufficiently unworthy of

recommendation. The optimal recommender system involves randomly triggered spamming

when recommendations are public—as is often the case for product ratings—and an information

“blackout” followed by a burst of spamming when agents can choose when to check in for a

recommendation. Fully transparent recommendations may become optimal if a

(socially-benevolent) designer does not observe the agents’ costs of experimentation.

11:45 am – 12:30 pm, Pak-Hung Au, Nanyang Technological University

“Pay to Quit and Team Incentives”

Abstract:

This paper examines the optimal compensation scheme, job design, and severance policy for a

team using a model of repeated moral hazard. In the optimal contract, the agent may be paid to

quit after a poor performance. We show that a generous severance policy facilitates the adoption

of team incentives and team-based production by making it cost-effective to implement peer

monitoring and sanction among the agents.


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Session 4 (2:30 pm – 5:05 pm; Chair: Kang Rong), Room 807, School of Economics, SUFE

2:30 pm – 3:15 pm, Marciano Siniscalchi, Northwestern University

“Sequential Preferences and Sequential Rationality”

Abstract:

Sequential rationality is the central notion of optimality in dynamic games. It requires that

players maximize their continuation payoff even at information sets to which they assign zero

probability. This paper is concerned with the revealed-preference foundations of sequential

rationality. Two issues must be addressed. First, the strategies players plan to follow are not

directly observable. Second, conditional beliefs following unexpected moves cannot be elicited

by standard means from ex-ante betting preferences. This paper proposes a novel choice criterion,

the "sequential preferences" model. A strategy that is maximal with respect to a player's

sequential preferences is sequentially rational. Furthermore, sequential preferences can be

elicited respecting incentive compatibility, using a variant of the strategy method of Selten

(1967). Thus, sequential preferences provide a revealed-preference rationale for sequential

rationality.

3:15 pm – 4:00 pm, Jian Li, McGill University

“Blackwell’s Informativeness Ranking with Uncertainty Averse Preferences” (with Junjie Zhou)

Abstract:

Blackwell (1951, 1953) proposes an informativeness ranking of experiments: Experiment I is

more Blackwell-informative than Experiment II if and only if the value of experiment I is higher

than that of experiment II for all expected-utility maximizers. Under commitment and reduction,

our main theorem shows that Blackwell equivalence holds for all convex and strongly monotone

preferences, i.e., the uncertainty averse preferences (Cerreia-Vioglio et al. 2011b), which nest

most ambiguity averse preferences commonly used in applications as special cases. Furthermore,

we discuss the possibility of extending the equivalence results to the no commitment case for the

maxmin expected utility and variational preferences under certain conditions.


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4:20 pm – 5:05 pm, Adam Wong, Shanghai University of Finance and Economics

“Nonlinear Pricing with Asymmetric Competition” (with Yong Chao and Guofu Tan)

Abstract:

This paper provides an alternative explanation for the prevalence of nonlinear pricing

mechanisms (e.g., various conditional rebates) in intermediate goods markets. We study a

three-stage game with complete information in which a dominant firm offers a nonlinear tariff

first and then a small rival firm offers a unit price, followed by a representative buyer making her

purchase decision. We apply mechanism design techniques to characterize subgame perfect

equilibria of the game and study the implications of the equilibria. The main messages of our

analysis are that nonlinear pricing can arise in the presence of competition but in absence of

private information, and that a dominant firm can use nonlinear pricing to restrict its rival’s

choices and profits and reduce the buyer surplus and possibly efficiency. Antitrust implications

of our findings are further discussed.


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List of Speakers:

Pak-Hung Au (Nanyang Technological U)

Yeon-Koo Che (Columbia)

Yuxin Chen (NYU Shanghai)

Hulya Eraslan (Rice )

Sambuddha Ghosh (SUFE)

Atsushi Kajii (Kyoto)

Fei Li (UNC)

Jian Li (McGill)

Jingfeng Lu (NUS)

Alessandro Pavan (Northwestern)

Marciano Siniscalchi (Northwestern)

Adam Wong (SUFE)

Jun Yu (SUFE)

Junjie Zhou (SUFE)

List of Participants:

Jimmy Chan (Fudan U)

Bo Chen (Southern Methodist U)

Yajing Chen (ECUST)

Cuihong Fan (SUFE)

Xiaojuan Hu (SUFE)

Qian Jiao (Sun Yat-Sen U)

Melody (Pei-yu) Lo (SUFE)

Dawen Meng (SUFE)

Bin Miao (SUFE)

Kang Rong (SUFE)

Jianfei Shen (Shandong U)

Ning Sun (SUFE)

Qianfeng Tang (SUFE)

Guoqiang Tian (TAMU and SUFE)

Zhewei Wang (Shandong U)

Haibo Xu (Fudan U)

Xiaoshu Xu (Shanghai Jiaotong U)

Wenzhang Zhang (SUFE)

Yongchao Zhang (SUFE)

Xin Zhao (Toronto)

Bingyong Zheng (SUFE)

文字材料 Program and Abstractseconen.shufe.edu.cn/_upload/article/files/c1/b4/da6c...6th Shanghai Microeconomics Workshop 1 Program June 12, 2015, Friday 6:30 pm Welcome Dinner,

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