The lack of hard evidence in allegations about sexual misconduct makes it difficult to separate true allegations from false ones. We provide a model in which victims and potential libelers face the same costs and benefits from making an allegation, but the tendency for perpetrators of sexual misconduct to engage in repeat offenses allows semiseparation to occur, which lends credibility to such allegations. Our model also explains why reports about sexual misconduct are often delayed, and why the public rationally assigns less credibility to these delayed reports.
February 2020
American Economic Journal: Microeconomics
We study how vertical market structure affects the incentives of suppliers and customers to develop a new input that will enable the innovator to replace the incumbent supplier. In a vertical setting with an incumbent monopoly upstream supplier and two downstream firms, we show that vertical integration reduces the R&D incentives of the integrated parties, but increases that of the nonintegrated downstream rival. Strategic vertical integration may occur whereby the upstream incumbent integrates with a downstream firm to discourage or even preempt downstream disruptive R&D. Depending on the R&D costs, vertical integration may lower the social rate of innovation.
January 2020
Journal of Economics and Management Strategy
An agent performing risky experimentation can benefit from suspending it to learn directly about the state. ‘Positive’ information acquisition seeks news that would confirm the state that favours experimentation. It is used as a last-ditch effort when the agent is pessimistic about the risky arm before abandoning it. ‘Negative’ information acquisition seeks news that would demonstrate that experimentation is futile. It is used as an insurance strategy to avoid wasteful experimentation when the agent is still optimistic. A higher reward from risky experimentation expands the region of beliefs that the agent optimally chooses information acquisition rather than experimentation.
January 2020
The Economic Journal
In an environment subject to random fluctuations, when does an increase in the breadth of activities in which individuals interact together help foster collaboration on each activity? We show that when players, on average, prefer to stick to a cooperative agreement rather than reneging by taking their privately optimal action, then such an agreement can be approximated as equilibrium play in a sufficiently broad relationship. This is in contrast to existing results showing that a cooperative agreement can be sustained only if players prefer to adhere to it in every state of the world. We consider applications to favor exchange, multimarket contact, and relational contracts.
January 2020
Games and Economic Behavior
Our Authors
Prof. Bingjing LI
Prof. Jing LI
Prof. Guoman SHE
Prof. Lynn Linghuan WANG
Prof. Michael He JIA
Prof. Alan P. KWAN
Ms. Zhengyu SHI
Dr. Xiaowei ZHANG
Prof. Balazs SZENTES
Prof. Yulin FANG
Prof. Jeffrey NG
Prof. Dragon Yongjun TANG
Prof. Bingjing LI
Associate Professor
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Prof. Jing LI
Deputy Area Head of Accounting and Law
Associate Professor
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Prof. Guoman SHE
Assistant Professor
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Prof. Lynn Linghuan WANG
Assistant Professor
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Prof. Michael He JIA
Deputy Area Head of Marketing
Associate Professor
Associate Director, Institute of Behavioural and Decision Science
Prof. Alan P. KWAN
Assistant Professor
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Ms. Zhengyu SHI
Research Postgraduate Student
Dr. Xiaowei ZHANG
Assistant Professor
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Prof. Balazs SZENTES
Chair of Economics
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March 2024
Prof. Yulin FANG
Professor
Director, Institute of Digital Economy and Innovation
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Prof. Jeffrey NG
Professor
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Prof. Dragon Yongjun TANG
Associate Director, Centre for Financial Innovation and Development
Professor