Renkun Yang (杨仁琨)
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WORKING PAPERS​

The Termination Clause as a Sequential Screening Device​ (submitted)   slides                 
The seller can use a combination of a termination fee and a floor price to sequentially screen an early-arrived buyer. ​     
ABSTRact 
​We consider a monopoly environment in which the buyers arrive sequentially and value uncertainty is resolved over time. We show that a "go-shop" contract involving a floor price and a termination fee between the seller and the initial buyer can extract rents from the new entrants, while it sequentially screens the early buyer. An optimistic early buyer accepts an offer with a high price and high termination fee to avoid fierce future competition. A pessimistic buyer, in contrast, promises a low price and accepts a low break-up fee. We confirm analytically and numerically that the seller can raise more revenue from this selling mechanism than from an optimal static mechanism when the early buyer faces sufficient uncertainty. This result provides a potential rationale for the use of go-shop provisions in the M&A market. 
Competitive Product Tests under Minimum Quality Standards​ (submitted)   slides            
​Firms conceal low qualities to increase passing rate and reveal high qualities to enlarge expected differentiation
.
Abstract
We consider a vertical oligopoly market in which (i) two firms have their products tested publicly before launch, and (ii) a minimum quality standard (MQS) is imposed. Firms choose the accuracy of their product tests, balancing two competing incentives: hiding information makes it easier to pass the MQS, while revealing information softens price competition through differentiation. In the unique symmetric equilibrium, each firm chooses a test that fully reveals high qualities and pools middle qualities around the MQS. For the regulator, the MQS reduces efficiency through reduced trade, though overall consumer surplus is increased due to intensified price competition. 
Information Design in Vertical Oligopolies​       slides      ​​           
​Competition drives oligopoly firms to disclose socially excessive quality information.​ 
ABSTRACT
We consider an oligopoly model in which firms choose how much quality information to release before launching a new product and involving in the price competition. In particular, firms have credibility and full flexibility in the choice of signal structures regarding their own products. When there is one-sided incomplete information, a ``pass or fail" information structure is optimal: the entrant only reveals whether its product quality exceeds a certain threshold. When there is two-sided incomplete information, both firms reveal more information to avoid Bertrand competition. We identify sufficient conditions for a full revelation equilibrium. We show that competition leads to excessive disclosure compared to the consumer- and social-optimal information structures.
Dynamic Assignment with Limited Commitment (with OSub Kwon)     slides​​​​​​​       ​         
​The principal can rebuild
 commitment by garbling the agent's report: less informative channel raises more information!
Abstract
​​We study optimal dynamic mechanism design when transfers are not allowed and the principal cannot commit to future allocations. Specifically, the principal (she) decides in each period whether to allocate a good to the agent (he), whose private value evolves over time. The efficiency-maximizing principal bears a cost of allocation that is not internalized by the agent. The optimal mechanism in the two-period model has two main features. First, the principal elicits truthful report from the low-type agent in the first period by promising him one unit in the second period. Second, to fulfill this promise the principal strategically garbles (without observing) the agent's initial report. As the time horizon expands, the efficiency loss from both the noisy communication and the distortion of future allocation is backloaded and vanishes in the infinite horizon limit.​

WORKS IN PROGRESS

Demand Elicitation for "Myopic" Monopolists with a Representative Consumer (with John Rehbeck)
Adapting the Groves-Ledyard Mechanism to Reduce Failures of Individual Rationality (with Paul J. Healy)
Selling Network Information (with Jianyu Xu)​ ​

SHORT NOTES

Rothchild-Stiglitz in (Ravid)-Roesler-Szentes                   
The RS approach is used to resemble the buyer optimal information in RS (2017) and the free-learning equilibrium in RRS (2019).


Competing for a Chance to Compete: a Persuasion Equilibrium in Natural Oligopolies          
A "matching-pennies" equilibrium is identified in a competitive persuasion model in which the winner of two entrants competes with an incumbant. 

Contracting Biased Experts: Limited Liability vs. Individual Rationality ​         
​
Imposing IR leads to artificial comparative statics when a principal compensate a biased agent with money in a quadratic loss model.
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