Yifan Zhang

Price Competition with Network Spillovers: Entry, Cohesiveness  and Interoperability   (Job Market Paper)

Abstract: Many products generate network spillovers: a user's value of such a product is higher when her contacts also use it. This paper studies competition between an entrant and an incumbent selling such products. In the model, the firms set personalised prices (for example, via targeted discounts), and consumers embedded in a network choose which product to buy. 

The pattern of equilibrium consumption is shown to be the same as if firms were to charge a price of 0 to all consumers. The equilibrium prices reflect incumbent advantage and depend on the network structure in nuanced ways. This provides the foundation for studying the profitability of entry and policy tools to enhance market contestability. A key structural feature of the network is found to be cohesiveness -- the extent to which consumers within a group are densely connected to one another. Entry is more profitable if the entrant has a cohesive and influential consumer base, so firms with such consumer bases are more likely to enter. While regulators use interoperability as a tool to improve market contestability, I show that interoperability can discourage entry and harm consumers depending on the cohesiveness of consumer bases. 

 Persuasion in Networks: Can the Sender Do Better than Using Public Signals?   Reject and resubmit at Journal of Economic Theory 

Abstract: Political and advertising campaigns increasingly exploit social networks to spread information and persuade people. This paper studies a persuasion model to examine whether such a strategy is better than simply sending public signals. Receivers in the model have heterogeneous priors and will pass on a signal if they are persuaded by it to take sender's preferred action. I show that a risk-neutral or risk-loving sender prefers to use public signals, unless the more sceptical receivers are sufficiently more connected in the network. This result still holds when the network exhibits homophily. When the sender is risk-averse or has a threshold function as payoff function, I characterise conditions under which the sender prefers to exploit the network. An important factor identified by these conditions is whether the less sceptical receivers are sufficiently connected. 

Network Threshold games  (with Alastair Lantry  and Sarah Taylor ) 

Abstract: This paper proposes a new lens for studying threshold games played on networks when the thresholds are heterogeneous. These are games where agents have two possible actions, and prefer action 1 if and only if enough of their neighbours choose action 1. We propose a transformation of the network that `absorbs' the heterogeneity in thresholds into the network. This allows us to characterise equilibria in terms of the k-core -- a well-studied measure of network cohesiveness -- of the transformed network. Our model is also the direct analogy to the workhorse model of Ballester et al. (2006) when actions are 0 or 1. Further, our binary action version exhibits a remarkable stability property. When agents have linear-quadratic preferences, the k-core of the transformed network characterises the unique subgame perfect equilibrium of a sequential move version of the game -- no matter what order agents move in.

Undergraduate Admissions interviewer for Christ's College, Murray Edwards College and Homerton College in 2023 and 2024, University of Cambridge

2022-2025: Undergraduate supervisor for Part I (first year) and Part IIA (second year) microeconomics, University of Cambridge

2022-2025: TA for Economic Theory and Analysis (Advanced undergraduate game theory course), University of Cambridge

2023-2025: TA for Diploma Microeconomics, University of Cambridge