Publications
Supply Chain Dynamics with Assortative Matching with Caichun Chai and Tiaojun Xiao
Journal of Evolutionary Economics 31.1 (2021) 179-206.
This paper studies the evolutionarily stable strategies of one-manufacturer and one-retailer supply chains. Each manufacturer and retailer chooses between two pure strategies of management: shareholder-oriented or stakeholder-oriented. Based on its management strategy, the firm decides its wholesale or retail price. We consider supply chains formed by two matching processes: random matching and assortative matching. Our results indicate that random matching does not support interior Nash equilibria; the evolutionarily stable strategy is for both manufacturer and retailer to choose shareholder strategy. We extend Bergstrom (2003) to a two-population game, and compare the dynamics of supply chains under random matching and assortative matching. Interior Nash equilibrium is observed with assortative matching. However, this interior equilibrium is unstable.
Grain Today, Gain Tomorrow: Evidence from a Storage Experiment with ROSCAs in Kenya with Shilpa Aggarwal and Jonathan Robinson
Journal of Development Economics 134 (September 2018) 1-15.
Staple food prices in rural Africa display predictable, sizeable seasonal price changes, from post-harvest troughs to lean season peaks. We experimentally evaluate a group-based grain storage scheme with 132 savings clubs in Kenya. Treatment clubs were offered a communal savings product in which farmers could deposit a fraction of their harvest, to be sold later in the season. Fifty-eight percent of farmers took up the product and treatment farmers were 23 percentage points more likely to store maize for the hungry season (on a base of 69 percent in the control group) and were twice as likely to sell maize.
Is Social Responsibility for Firms Competing on Quantity Evolutionarily Stable? with Caichun Chai and Tiaojun Xiao
Journal of Industrial & Management Optimization 14.1 (2018), 325
This paper studies the evolutionary stable strategies and preferences regarding corporate social responsibility of competing firms. Firms randomly compete with each other in pairs. Shareholder-oriented firms have no social responsibility concern, whereas a firm that is concerned with social responsibility is stakeholder-oriented. Each firm first picks one of two production strategies: shareholder-oriented or stakeholder-oriented, and then decides production quantity. We find that socially responsible firms have lower retail prices. The evolutionary stability of a strategy depends on product substitutability and the degree to which firms care about social responsibility. When product substitutability is relatively high, stakeholder-oriented strategy is the evolutionary stable strategy; if product substitutability is lower than a threshold, shareholder-oriented strategy is evolutionary stable; and with moderate product substitutability, both strategies are evolutionary stable. Furthermore, we consider how the degree of social responsibility preference evolves according to the adaptive dynamics to continuously stable preference. We find that the non social responsibility concern behavior is not an evolutionary stable preference; there is a unique continuously stable degree of social responsibility preference. Furthermore, we find the evolutionary stability of shareholder-oriented and stakeholder-oriented depends on the initial distribution of firms' strategies under the continuously stable social responsibility preference.
Working Papers
Paying to Repay? Experimental Evidence on Repayment Commitment (Job Market Paper)
This paper studies the demand for, and welfare impacts of, costly self-control. I offer Malawian micro-entrepreneurs solar lamps for purchase, for which payment can be completed either in weekly installments or as a single deferred lump sum payment. An incentive-compatible willingness-to-pay experiment reveals that individuals are willing to pay a premium of nearly 22 percent of the price of the solar device to pay for it in weekly installments. Lack of access to secure savings technologies, and demand for self control rules can both drive demand for the installments plan. To identify the relative importance of each of these factors, I induce experimental variation in access to a secure savings technology. Despite a 15 percent reduction in the premium among those given the savings technology, it remains large and significant indicating the there are barriers to saving beyond access to basic savings products. Paying in installments increases the probability of timely completion of payment by 13 percentage points, but defaulters are hurt more by the installments plan than the lump sum plan
Digital Credit: A Snapshot of the Current Landscape and Open Research Questions
with Joshua Blumenstock and Jonathan Robinson. CEGA white paper and BREAD working paper #516.
In the past few years, digital credit has emerged as an alternative mechanism for providing short-term loans. In this overview, we summarize the current state of digital credit, focusing primarily on the currently dominant form of credit – consumer loans offered through mobile money systems, often backed by a financial institution. We summarize the current landscape, and we discuss various ways in which digital credit will represent a change from previously available forms of credit, in particular microcredit or bank loans. We conclude with some possible directions for further research.