Students on the Job Market and Placement Record

Students on Job Market

PhD candidates on Job Market, 2019

Xiu CHEN

Job Market Papers

(1) How time flies!

Abstract: The paper points out a potential gap between intertemporal choices and time preference: the observed intertemporal decisions could be driven by a biased perception of time, and thus may not completely reveal the true time preference. To test this conjecture, we explore the relationship between underlying time perception and the observed intertemporal choices by conducting a laboratory experiment, in which cognitive load is used as an instrument to manipulate time perception. We find that the perceived time lengths for subjects with high cognitive load are shorter than those with low cognitive load. Moreover, there is a correlation between an individual’s time overestimation and his observed impatience. Lastly, our results suggest that time perception mediates part of the cognitive load’s effect on intertemporal choices, supporting our conjecture.

(2) Concentration and Variability of Forecasts in Artificial Investment Games: An Online Experiment On WeChat

Abstract: This paper is the first to use the WeChat platform, one of the largest social networks, to conduct an online experiment of artificial investment games. We investigate how people’s forecasts about the financial market are shaped by whether subjects can observe others’ forecasts and whether subjects engage in public or private investment decisions. We observe a strong positive correlation between forecasts and investments, suggesting an association between individual’s reported forecast and his belief. More importantly, we find that with forecast sharing, subjects’ forecasts converge but in different directions across groups, and there is not significantly more rational decisions made.
Research Interests:

Research Interests

Experimental Economics, Behavioral Economics, Economics and Psychology

 Personal website:  http://xchen56.weebly.com/

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Wing Fung CHENG, John 

Job Market Paper

Envy of Neighbours: Contests with Network-Specific Externalities

Abstract: There is an interesting phenomenon that people buy lottery tickets because they would be miserable if their neighbours won and they were left out. We examine the effect of neighbours' envies by considering a lottery contest in which individuals are in one of the two networks and each network has its network-specific negative externality. We find that two interesting phenomena may arise in equilibrium. First, only the individuals in the network with large externalities exert effort while individuals in the network with moderate externalities do not exert any effort. Second, a smaller network has a higher probability of winning which can be viewed as another version of the group size paradox. We contribute to the contest literature by showing the effect of network-specific negative externalities on equilibrium outcomes.

Research Interests

Experimental economics, game theory , industrial organization

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Xiaoxiao HU

Job Market Paper

Verifiability and Fraud in a Dynamic Credence Goods Market (joint with Jialiang Lin)

Abstract: Complementary to the existing literature that extensively studied credence goods markets in static settings, we develop a dynamic model in which a durable good breaks down stochastically after treatments, and the customer meets the expert recurrently. We assume that the minor treatment alleviates the symptom of the major problem but fails to cure it, increasing the future failure rate. In contrast to the literature, we show that the truth-telling equilibrium never exists under the verifiability assumption, because the standard equal-margin condition fails. In our dynamic setting, the expert has a stronger incentive to undertreat since undertreatment induces more future business. But on the other hand, the customer becomes less willing to pay for the minor treatment for fear of increased future payments. Therefore, depending on the relative magnitude of these two opposing forces, either undertreatment or overtreatment can emerge in equilibrium. Surprisingly, the expert's incentive to undertreat weakens as the increment of failure rates rises.

Research Interests

Industrial Organization, Repeated/Dynamic Games, Applied Microeconomic Theory

Personal Website

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Bo WANG

 Job Market Papers 

(1) “Name, Politician Selection, and Political Accountability” 

Abstract: We introduce a name market into an overlapping generations model to address politician selection and political accountability when there is no re-election concern. We show the name market could mitigate both problems. On the one hand, name screens young politician; on the other, name incentivizes old politician. Therefore, politician selection and political accountability arise even in the absence of re-election. With the name market, we further examine the relationship between transparency on politician’s type and citizen’s welfare. Because transparency on politician’s type is a perfect substitute of the name, such transparency crowds out name demand, and may ultimately reduce citizen’s welfare. Due to such crowding out effect, we identify a new inter-generation conflict over transparency policy: while the young generation is a keen advocate of high transparency, the old prefers low transparency.

 (2) “Network, Coordination, and Contagion” 

Abstract: We provide an endogenous network formation model in which agents pay a cost to form an information network before coordination. We show on equilibrium, such a network takes the shape of a star network, which aggregates and communicates information to every participant, and ultimately enhances the chance of coordination success. We further introduce a name market to screen agents with the highest leadership ability to be the center of the star.  The leadership and name market reinforce each other over time, leading to coordination contagion. Moreover, we identify a non-monotonic relationship between linking cost and coordination success; by such a relationship, we derive the optimal linking cost and discuss its policy relevance.

Research Interests

Applied Microeconomic, Political Economy, Global Game

Personal Website: https://sites.google.com/site/bwangag/

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Sichuang XU

 Job Market Paper

 “Debt Overhang and Inefficient Capital Reallocation”

Abstract: This paper develops a general equilibrium model of firm over-borrowing with debt overhang, providing a novel angle for evaluating preventive policies during a corporate credit boom. When capital decisions must be made under idiosyncratic uncertainties, firms’ individually optimal investments ex-ante fail to internalize their effects on raising equilibrium asset price and overall indebtedness which, through debt overhang, squeezes borrowing capacity ex-post, weakens reallocation and depresses productivity. This pecuniary externality leads to a wedge between private and social costs of debt, thereby leaving room for regulations. Optimally set policy mix is time-consistent, whereas restrictions on ex-ante regulation, such as circumvention and insufficient legal mandates, create a role for commitment on ex-post intervention, in which case bailing out existing debts is less desirable than subsidizing new ones.

We quantify the magnitude of inefficiency using an augmented industry dynamics model parameterized by a pan-European firm-level dataset. In the model, capital reallocation efficiency drops by 20% less in credit crunch if the economy ex-ante de-leverages to the constrained efficient level. In addition, the excessive accumulation of long-term debt during years of credit boom leads to declining capital reallocation efficiency not only in boom years but also in the credit bust that may follow. 

Research Interest

Macroeconomics, Financial Economics, International Economics, and Quantitative Methods

Personal Website: http://sichuang.weebly.com/

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Xianqiang ZOU

Job Market Paper 

One Child Policy and Intergenerational Mobility In China

Abstract: This paper theoretically and empirically examines how fertility decline induced by the One Child Policy has affected intergenerational mobility in China. In a simple human capital in- vestment model incorporating fertility and credit constraints, we show that fertility decline narrows the educational attainment gap between children from credit-constrained families and non-credit-constrained families, hence increases the intergenerational mobility. We also provide empirical evidence to verify our theoretical predictions. Using variation in the implementation intensity of the One Child Policy across regions and cohorts, we address the endogeneity of the fertility decision. Estimation results show that lower fertility increases intergenerational mobility.

Research Interests

Labor Economics, Development Economics, Applied Econometrics, Chinese Economy 

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Students' Placement

MPhil/PhD Program in Economics:  Student Placement

2018

2017 

2016