Publications
.Laboratories of Democracy: Policy Experimentation under Decentralization (with Christopher Li) AEJ: Micro Vol.11, Issue 3, August 2019
Moral Hazard in Teams with Subjective Evaluations The RAND Journal of Economics Vol. 52, Issue 1, Spring 2021
Variations in Governmental Responses to and the Diffusion of COVID-19: The Role of Political Decentralization (with Jiasheng Li and Chuanchuan Zhang) Frontier of Economics in China Vol. 16, Issue 4, December 2021
Which Networks Permit Stable Allocations? A Theory of Network-based Comparisons (with Yiqing Xing) Theoretical Economics Vol. 17, Issue 4, November 2022
A Screening Perspective on Experimental Zones (with Yiqing Xing) China Economic Review Vol. 77, Issue 1 , February 2023
Informal Economy, State Capacity and Local Innovation (with Yiqing Xing) China Economic Quarterly Vol. 24, No. 3, May 2024
Degree-Weighted Social Learning (with Xiao Han, Xin Tong, Yusheng Wu and Yiqing Xing) AEJ Micro Conditional Acceptance
Working Papers
Policy Vagueness and Reputational Concern (with Liuchun Deng and Yufeng Sun)
--We develop a game-theoretic model to examine how a leader's reputational concern influences the vagueness of policy guidance provided to subordinates. The leader, driven by both reputational and policy concerns, can be either congruent--aligning with citizens' policy preferences--or non-congruent. The leader's reputational concern arises from the desire to be perceived as congruent by citizens. Vague guidance obscures the leader's preferences and encourages subordinates to experiment, whereas clear guidance leads to uniform policy implementation. Our analysis reveals that although vagueness dominates when leaders are motivated solely by either policy or reputational concerns, an incentive for clarity can emerge from the trade-off between these two motives. This result suggests a non-monotonic relationship between reputational concern and policy vagueness. We further examine how reputational concern may negatively affect social welfare, analyze the roles of the leader's ex ante congruence and competence, and apply our theory to interpret real-world examples.
--We develop a game-theoretic model to examine how a leader's reputational concern influences the vagueness of policy guidance provided to subordinates. The leader, driven by both reputational and policy concerns, can be either congruent--aligning with citizens' policy preferences--or non-congruent. The leader's reputational concern arises from the desire to be perceived as congruent by citizens. Vague guidance obscures the leader's preferences and encourages subordinates to experiment, whereas clear guidance leads to uniform policy implementation. Our analysis reveals that although vagueness dominates when leaders are motivated solely by either policy or reputational concerns, an incentive for clarity can emerge from the trade-off between these two motives. This result suggests a non-monotonic relationship between reputational concern and policy vagueness. We further examine how reputational concern may negatively affect social welfare, analyze the roles of the leader's ex ante congruence and competence, and apply our theory to interpret real-world examples.
Principal Competence and Organizational Candor: How Moderate Expertise Breeds Cover-Ups (with Yufeng Sun)
--Across healthcare, aviation, and corporate settings, partial improvements in oversight or leadership often lead to more sophisticated cover-ups rather than more candor. Conventional wisdom suggests that more competent principals improve evaluation and decision-making, yet prior theoretical work also shows that competence can backfire. We study how a principal’s competence shapes communication and welfare and establish a non-monotonic impact of competence that reconciles these views. In our model, a principal jointly evaluates project quality and agent competence based on the agent’s report. Strategic incentives—in particular, fear of replacement—distort information transmission, and the form of distortion depends on the principal’s competence. Moderate competence induces cover-ups (reporting good news when the truth is bad), while high competence induces crying wolf (reporting bad news when the truth is good). As leaders become more competent, agents’ incentives to act as yes-men—recommending the status quo rather than replacement—intensify. This dynamic reduces welfare when the principal is moderately competent but increases welfare when the principal is highly competent, yielding a U-shaped relationship between competence and welfare. These findings highlight how partial improvements in competence can worsen outcomes and suggest institutional remedies such as separating evaluation tasks or protecting whistleblowers.
--Across healthcare, aviation, and corporate settings, partial improvements in oversight or leadership often lead to more sophisticated cover-ups rather than more candor. Conventional wisdom suggests that more competent principals improve evaluation and decision-making, yet prior theoretical work also shows that competence can backfire. We study how a principal’s competence shapes communication and welfare and establish a non-monotonic impact of competence that reconciles these views. In our model, a principal jointly evaluates project quality and agent competence based on the agent’s report. Strategic incentives—in particular, fear of replacement—distort information transmission, and the form of distortion depends on the principal’s competence. Moderate competence induces cover-ups (reporting good news when the truth is bad), while high competence induces crying wolf (reporting bad news when the truth is good). As leaders become more competent, agents’ incentives to act as yes-men—recommending the status quo rather than replacement—intensify. This dynamic reduces welfare when the principal is moderately competent but increases welfare when the principal is highly competent, yielding a U-shaped relationship between competence and welfare. These findings highlight how partial improvements in competence can worsen outcomes and suggest institutional remedies such as separating evaluation tasks or protecting whistleblowers.
Governmental System and Economic Volatility under Democracy (with Christopher Li, He Wang, Zitong Zhang and Weifeng Zhong)
A Theory of Multiplexity: Sustaining Cooperation with Multiple Relationships (with Wei Huang and Yiqing Xing)
Work in progress
Communication with Discretion (with Jin Li and Yiqing Xing)
Algorithm Competition and Social Welfare (with Jiawei Wang, Xin Tong and Matteo Sesia)
Algorithm Competition and Social Welfare (with Jiawei Wang, Xin Tong and Matteo Sesia)