Research

Working Papers

[1] Acceptance Deadlines and Job Offer Design (with Changying Li) 

This paper studies talent recruiting in an incomplete-information environment with the acceptance deadline of an employer’s job offer being a strategic recruiting device. When the terms of employment are invariable, increasing the acceptance deadline raises the chance of the employer hiring candidates with more promising outside options, but reduces the probability of hiring those with less promising alternatives. The employer is more likely to choose extreme deadlines, i.e., extend exploding offers, which require immediate responses, and open offers, which have the longest deadline, when the candidate is more willing to postpone his acceptance decision. Committing herself to a firm deadline is not optimal for the employer; allowing requests for a deadline extension benefits the two parties. When incorporating the acceptance deadline into the design of the job offer, the optimal design for the employer can be implemented using a “bonus-for-early-acceptance” (BFEA) mechanism, which is widely applied in practice. In a BFEA mechanism, the employer (i) specifies a date that her offer expires and (ii) provides a salary bonus for accepting the offer, which is decreasing over time before the offer expires. A candidate anticipating a better outside option takes a longer time to respond and receives a lower bonus. Our result indicates that different BFEA mechanisms adopted in various real-world labor markets reflect the level of competition faced by employers.

[2] Heterogeneity and Unanimity: Optimal Committees with Information Acquisition (R&R International Economic Review)

This paper studies how the composition of a decision-making committee and the voting rule it uses affect the incentives for its members to acquire information (and thus the quality of its collective decision). Keeping the voting rule unchanged, a more polarized committee acquires more information in equilibrium. If a committee designer can choose both the committee members and the voting rule to maximize her expected payoff from the collective decision, she will form a heterogeneous committee that adopts a unanimous rule. In this committee, one member moderately biased toward one decision serves as the decisive voter, and all other members have extreme preferences opposed to that of the decisive voter and serve mainly as information providers. The preference of the decisive member is not perfectly aligned with that of the designer.

[3] Norms of Corruption in Politicians' Malfeasance (with Gustavo Bobonis, Anke Kessler) 

To what extent can audits serve to limit patronage and corrupt networks effectively and sustainably in clientelist societies with a prevailing norm of corruption? We develop a political agency model in which office holders are motivated to reduce rent seeking behavior through re-election incentives operating via elections and audits (formal institutions), but also through reputational concerns that are influenced by the prevailing norm on corruption in their peer group (informal institutions). We show that, while the formal institutions of audits and elections have the desired direct effect of reducing corruption, they also affect informal rules of conduct, which can have unintended effects. We then apply this theoretical framework to evidence from Puerto Rico’s anti-corruption municipal audits program over the period 1987-2014, and argue that the interaction of elections, audits, and norms can help explain a peculiar pattern in the data. Using a quasi-experimental design based on the exogenous timing of audits relative to elections, we find that mayors respond positively to audits in their own community, but negatively to audits - and the corresponding reduction in corruption - in neighboring municipalities. Our estimates suggest a large negative spillover effect: communities where two-thirds of adjacent jurisdictions undergo a (timely) audit experience a 30 percent increase in reported corruption levels.

[4] How to Persuade a Group: Simultaneously or Sequentially? [Slides] 

Work in Progress

[1] Non-Discriminatory Provisions in Credit Card Markets (with Ying Tung Chan, Hongru Tan)

Publications/Forthcoming

[1] Voting to Persuade (with Tsz-Ning Wong, Lily Ling Yang), Games and Economic Behavior, 145: 208--216, 2024

[2] Auction Design by an Informed Seller: A Foundation of Reserve Price Signalling, Canadian Journal of Economics 56(3): 1161--1190, 2023

[3] Commitment and Cheap Talk in Search Deterrence (with S. Pan), RAND Journal of Economics 54(2): 325--359, 2023

Pre-Doctoral Research Projects:

[4] FDI and Environmental Regulation: Pollution Haven or a Race to the Top? (with B. Dong, J. Gong),  Journal of Regulatory Economics 41(2): 216--237, 2012 

[5] International R&D Networks (with B. Dong, J. Zhang, L. Zu),  Review of International Economics 19(2): 325--340, 2011

[6] International Environmental Agreement Formation and Trade (with B. Dong),  Asia-Pacific Journal of Accounting and Economics 16(3): 339--356, 2009

Research Grants (Principal Investigator)

[1] National Natural Science Foundation of China, Project No.72373025, CNY 400,000, 2024-2027

       Search Deterrence in Dynamic Markets: Theory and Experiments

[2] Fundamental Research Funds for the Central Universities in the University of International Business and Economics, Project No. 22YB09, CNY 60,000, 2023-2026