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Anqi Li
Job Market Candidate
Stanford University
Department of Economics
579 Serra Mall
Stanford, CA 94305
650-521-54097
[email protected]
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Research
A Folk Theorem with Virtually Enforceable Actions (Job Market Paper, updated!)
We prove a Folk Theorem for infinitely repeated private monitoring games with virtually enforceable actions. In these monitoring situations with scarce signals, players need to depart from the efficient outcome occasionally to acquire the information that detects profitable deviations of other people. We design a novel Budget Mechanism with Cross-Checking (BMCC) in a finite horizon setting with monetary transfers and public communication, and embed it in the construction of Perfect Bayesian Equilibria of the infinitely repeated game to sustain the interior of the set of feasible and individually rational payoffs when players are sufficiently patient. BMCC links actions choices over time and virtually implements the efficient outcome at a vanishing incentive cost as the horizon grows and the players become patient. It outperforms the Mechanisms with Public Communication and Public Strategies (MPP), which incur a non-vanishing incentive cost by restricting the actions to be independent across periods.
Employment Relationship with Costly Subjective Performance Evaluations (Application of Job Market Paper)
This paper studies employment relationships with costly subjective performance evaluation. When performance measures are subjective and are costly to construct, we explore contractual arrangements to provide the raters an incentive to engage in costly monitoring activities and to communicate the assessment truthfully. In a repeated agency setting, we propose a class of contracts that achieves the fastest rate of convergence in incentive cost as the duration of the employment relationship grows. Our analysis sheds light on a range of real world personnel policies, including multi-source appraisal systems and rules that enhance the rater's commitment on feedback provision.
On the Role of Trust-Based Mechanism in Firm Level Know-How Transmission
This paper explores the implication of agency problems on the transmission of tacit knowledge between firms. At the heart of our analysis is an adverse selection problem, that knowledge of an underlying cooperative opportunity is unevenly distributed between the parties at the onset of the relationship, and a moral hazard problem, that the more informed party is tempted to take private actions to keep the knowledge secret. Using continuous time techniques, we characterize the optimal relational contract proposed by the less informed party, which takes the form of a simple trustworthiness score to the informed party during the knowledge transmission process. Our analysis provides a uniform framework for studying a broad range of subjects, including the prevalence of trust-based mechanisms in the know-how transmission process, firm-level differences in technology adoption and the evolution of business partnerships.
Selling Storable Goods to a Dynamic Population of Buyers: A Mechanism Design Approach
We study the problem of homogenous storable goods over a finite time horizon. Buyers arrive stochastically over time and discount the future by a non-zero discount factor once upon arrival. They have single unit demand, and privately observe their arrival date and valuation for the product. In this setting, we characterize the allocation rule that maximizes the expected total surplus and implement it by a direct mechanism that is periodic ex-post incentive compatible and individually rational. We also devise a multi-round simultaneous ascending auction as an outcome equivalent indirect mechanism and contrast it with the standard uniform price auction to highlight issues created by market dynamics.
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