Publications
"Impact of Economic Globalization on Income Inequality: Developed Economies vs Emerging Economies,"
with Inmee Baek, Global Economy Journal, 2016, 16.1: 49-61.
Dissertation Papers
Chapter 1: "An Experimental Study of Selling Expert Advice" (Job Market Paper) (PDF)
Qichao Shi, James Dearden, Ernest Lai
Abstract
This study explores the interaction between a product expert, who offers to sell a product ranking, and an incompletely
informed consumer. The consumer considers acquiring the expert's product ranking not only because the expert has
superior information about the quality of the products the consumer is considering and knows the consumer's utility
function, but also because the expert can directly influence consumer utility of a product by the product's rank.
There are multiple equilibria in this setting with strategic information transmission: ones in which the expert
ranks products in a manner that is consistent with the consumer's pre-ranking utilities, which depend exclusively
on the products themselves, and ones in which the expert does not. We design a laboratory experiment to investigate
which equilibrium an expert and consumer play. Across the three treatments we examine, which vary by the consumer's
possible pre-ranking utilities, we find evidence that product experts are likely to select a ranking methodology
that involves considerable uncertainty about the final product ranking, even though doing so involves ranking products
in a manner that is inconsistent with consumer pre-ranking utilities.
Chapter 2: "Third-party Product Reviews and Advertising"
with James Dearden, David Goldbaum, and Ernest Lai
Abstract
Third parties in reviewing products provide information about the quality of the products, which can influence
advertising strategies by the firms whose products have been reviewed. For example, if the information provided by
third-party reviewer shows that a product is better in a particular attribute than the priors of consumers, then
at first glance the product's manufacturer should guide consumers to read or view the third-party review.
In our model, firms have the option to inform consumers about product attributes in general, and about third-party
reviews in particular, as well as persuade consumers about the importance of particular product attributes.
One result of our model -- one that is counter to the above first-glance intuition -- is that a firm may not
inform consumers by sending them to the third-party review or informing consumers itself, that a particular
product attribute is better than expected. Doing so might reduce product differentiation in the market for the
firm's product and as a result stiffen price competition. Competition is heightened if the perceived quality of
its product moves closer to its competitors'. This result extends the incomplete disclosure theory in the
literature by finding that the optimal disclosure strategy is determined by competition situations. However,
considering persuasive advertising, the firm may persuade consumers about the importance of the attribute in which
it has a comparative advantage (albeit lower than its competitors' quality of the attribute). In the policy arena,
due to a free-rider problem among competitors whose products are being reviewed, we find potential industry-wide
under-informative advertising about third-party product reviews.
Chapter 3: "Product Return Policies"
with James Dearden, David Goldbaum, and Ernest Lai
Abstract
This paper examines a retailer's optimal product return policy within an environment in which consumers differ in their
product return propensities. A liberal return policy is good for consumers because it increases consumer expected
utility by lowering the risk involved in purchases that turn out to be of low value. However, it is bad for retailers
because it leads to frequent returns. In addition to characterizing retailer-optimal product return policies,
our primary goal is to identify the scenarios in which retailers: (i) offer free returns, no returns, or policies
in between; (ii) ban some consumers from returning products, or more generally tailor return policies to consumer
attributes; and (iii) effectively fire some consumers from purchasing products at all. To characterize each of these
three scenarios, we include in our model cases in which consumers vary by their distributions over possible product
values (and a retailer may or may not be able to identify consumers by these product return preferences), consumers
differ by their hassle costs of returning products, and products returned by consumers involve an additional cost
to retailers either in the form of restocking fees or losses in product value.
Working Papers
"Sources of Income Inequality from a Global Perspective: Evidence of Country Heterogeneity"
Qichao Shi
Research in Progress
"Ranking and Matching: An Experiment"
with James Dearden, Qinxin Geng and Ernest Lai
Research Experience
Research Assistant, Department of Economics, Lehigh University, Fall 2018
Research Assistant, Prof. James Dearden, Lehigh University, Summer 2018
Research Assistant, Prof. James Dearden, Lehigh University, Summer 2017
Research Assistant, Prof. Thomas Hyclak, Lehigh University, Summer 2016