PhD Candidate, Department of Economics

Contact Information

Department of Economics
Northwestern University
2211 Campus Drive
Evanston, IL 60208

Phone: 847-454-4125
Email: junyanguan2016@u.northwestern.edu

This site is no longer updated. Please visit my Personal Website.

 

Education

Ph.D., Economics, Northwestern University, 2022 (expected)
M.S., Economics, University of Wisconsin-Madison, 2016
B.A., Finance, Fudan University, China, 2014

Primary Field of Specialization

Industrial Organization

Secondary Field of Specialization

Applied Microeconomics

Curriculum Vitae

Download Vita (PDF)

Job Market Paper

Reserve Price Signaling with Public Information: Evidence from Online Auto Auctions” with Boli Xu

Abstract: The “linkage principle” in auction theory states that the seller can gain more profits by revealing all available information, positive or negative, about the object’s value. However, in real-world auctions, sellers often hide their reserve price. This is known in the literature as the “secret reserve price puzzle”. In this paper, we propose a novel explanation to the puzzle. We consider an auction model in which a seller’s choice of reserve price signals her private information about the object’s quality. We show that such a signaling incentive could decrease the seller’s profit and probability of sale in equilibrium, with a larger impact when the seller’s private information is more precise relative to the public information announced by a third party. We estimate the reserve price signaling model using a novel dataset from a large online auto auction platform. We find that the signaling incentive could cost the seller 4% of her profit and decrease the probability of sale by 15 percentage points. Counterfactual simulations suggest that a secret reserve price can improve both the seller’s profit and probability of sale, especially when the signaling incentive is strong. Our findings support the prevalent use of secret reserve prices in practice, contrary to the predictions of the linkage principle.

Other Research Papers

Price Reference Effects and Vertical Contracts in the Book Retail Market” with Ting Wang

Abstract: In many settings, behavioral economists have documented a price reference effect: the fact that a consumer’s willingness to pay for a good is affected by difference between the observed price and the reference price they rationally expect. In this paper, we show that such preferences interact with vertical contracting in a way that can overturn standard textbook intuition. In particular, we show that if this price reference effect is sufficiently large, vertical integration between an upstream producer and a downstream retailer can decrease joint profits, unlike in the textbook case where vertical integration improves profits. The key intuition is that the increase in quantity is dampened when consumers update their expectations. To test whether this force is large in a real-world setting, we develop a model of a downstream retailer who faces behavioral consumers and bargains with an upstream producer. We estimate this model using a novel dataset from a large online book retailer, where we observed retail prices, quantities sold and wholesale prices. Counterfactual simulations show that vertical integration would reduce joint profits by 11%. These findings highlight the importance of incorporating consumer expectations in the analysis of optimal pricing and firm profits.

Automobile Replacement and Government Subsidy: An Analysis of the CARS Program

Abstract: Subsidy programs are widely used by governments to stimulate activities in the durable goods sectors. This paper investigates the impact of government subsidies on consumers’ automobile replacement decisions in the context of the U.S. Car Allowance Rebate System program in 2009. I develop and estimate a dynamic discrete-choice model of automobile replacement, and conduct counterfactual analysis to evaluate the effects of government subsidies. Results show that 65% of the households would replace their vehicles even without the subsidy, and the reductions in gasoline consumption and carbon emission are limited. To highlight the impact of subsidy design, I show that limiting the subsidies to low-income consumers would generate 85% of the sales with half amount of total government spending. These findings emphasize the importance of balancing policy stimulus with government spending and targeting consumers more efficiently in the design of subsidy programs.

Work in Progress

“Dynamic Online Auctions with Costly Bidding” with Jin Yang

“Skipping the Line: Inequality in Access to Primary Physicians” with Yangzi Jiang

References

Prof. Robert Porter (Committee Co-Chair)
Prof. Vivek Bhattacharya (Committee Co-Chair)
Prof. Mar Reguant