econ

Here’s a reallly cool paper. Bergemann et al. (2015) The Limits of Price Discrimination. AER. DOI: http://dx.doi.org/10.1257/aer.20130848 ABSTRACT We analyze the welfare consequences of a monopolist having additional information about consumers’ tastes, beyond the prior distribution; the additional information can be used to charge different prices to different segments of the market, i.e., carry out “third degree price discrimination.” We show that the segmentation and pricing induced by the additional information can achieve every combination of consumer and producer surplus such that: (i) consumer sur- plus is nonnegative, (ii) producer surplus is at least as high as profits under the uniform monopoly price, and (iii) total surplus does not exceed the surplus generated by efficient trade....

Regulation restricts the action of economic agents—in general. It is omnipresent. Why does regulation exist? In a free-market economy, why does the government choose to place restrictions on the decisions of certain agents and actions? George Stigler (1911-1991) introduced his “Theory of Economic Regulation” in 1971 trying to answer this question in a well-established framework, on the basis of some previous empirical arguments such as Normative Analysis as a Positive Theory (NPT) or Capture Theory (CT)....

speaker: Ming Hu | Prof., University of Toronto Keys: random product offering/demand allocation/pricing algorithm. TALK ABSTRACT: First, we study blind boxes as a novel selling mechanism in which buyers purchase sealed packages containing unknown items, with the chance of uncovering rare or special items. We show how such product randomization introduced by the blind box can improve the seller’s profitability over traditional separate selling. Second, we study how an e-commerce platform should assign sequentially arriving customers to sellers who compete to sell identical products on the platform....

In choosing between issuing a 1-billion loan to one massive state-owned enterprise or lending 1 million to a thousand smaller companies, most would prefer the first option as it seems more convenient and reliable. However, Zhejiang Tailong Commercial Bank (TaiLong Bank) takes the less-traveled path – the bank provides financial services to small-and-micro-enterprises (SMEs). Since its inception, the bank has cumulatively provided over ¥150 billion (around $23 billion) in loans, with an average loan size of ¥500,000, to its clientele, over 90% of whom are peasants-turned-entrepreneurs....

Zhejiang Tailong Commercial Bank (TLB) is the most renowned Small-and-Medium-sized Enterprise (SME) financing service provider in China. TLB has invested over ¥100 million in its charity fund and consistently allocates 2% of its revenue to its foundation. I was fortunate to receive a scholarship sponsored by TLB and even more so to be invited to their headquarters today for a face-to-face meeting with their chairman and the leaders of the Shanghai Branch....

When opportunity comes, say, when you find yourself sharing an elevator with a Nobel Prize winner in your field, with just a few floors left to impress them. It’s sales pitch in academic–to impress people using a concise, compelling summary that highlights the brilliance and relevance of your work. It’s your chance to leave them thinking, “Wow, I need to know more about this!” In my journey, I often find myself needing to explain kidney exchange to introduce people to market design—my dream field....

The maternity care units in both the United States and China are facing a dilemma that threatens the very foundation of obstetric services. This crisis, while nuanced in its manifestation in each country, shares a common thread of financial strain, staffing challenges, and misaligned incentives that put the future of maternity care at risk. The American Struggle In the United States, the situation is particularly dire in rural areas, where more than 200 hospitals have closed their labor and delivery services over the past decade....

Imagine you’re analyzing a group of general undergraduates taking math classes. Some are social science majors who might be taking introductory statistics, while others are engineering majors taking advanced calculus. You need some index to measure the average difficulty level of the math classes taken by all these students, say, Stats101 for 1pt while Real Analysis gets 10pt and we’ll take arithmetic mean as the difficulty score representing the general course level taken by all the students....

In the curious world of TaoBao, China’s e-commerce giant, I stumbled upon what can only be described as a “feature” cleverly masquerading as a bug. Once in a while, TaoBao hosts what’s known as the “cross-seller price-break discount.” In theory, this sounds like a standard promotional sale—spend a certain amount across various sellers, and voila, you snag a discount. For instance, rack up items totaling 300 yuan from participating sellers, and you’re treated to a 40 yuan discount....

Today’s blog draws inspiration from Michael D. Smith’s perspective on higher education, as discussed in a recent episode of the podcast People I (Mostly) Admire, titled “Higher Education Is Broken. Can It Be Fixed?” . Btw, the podcast itself is part of the Freakonomics network, the academically inclined perspective is particularly sweetspot for an econ student. This episode elucidates the systemic flaws plaguing the U.S. higher education system. One pov involves diving into the market power of colleges....