Publications

Executive Summary

My research spans financial networks, financial econometrics, digital finance, and household finance. The corresponding papers are published in journals like Systems Engineering - Theory & Practice (系统工程理论与实践) and Sustainability.

Published papers

• Zeng, Yan, Xuefeng Wu, Junqing Kang, and Zhuoran Chen, 2023. Optimal Coupon Cooperation Policy of E-commerce Platforms and E-tailers and Its Benefit. Systems Engineering – Theory & Practice, 43(1): 110-134. Link, PDF.
  • This paper constructs a theoretical model to study the optimal strategy and economic benefits of e-commerce platforms and their merchants when issuing coupons cooperatively. By further comparing the above results with the traditional coupon strategy and examining the interaction between coupon strategies and advertising promotion strategies, we find that: 1) settled merchants would be more willing to participate in the cooperative issuance of coupons with the decrease in the platform commissions, the cost of merchants when participating in the cooperative issuance of coupons and the expansion of the market scale of merchants’ platform sales channels; 2) the merchants’ incentive to participate in coupon cooperation increases with e-commerce platform’s spending on marketing; 3) there exists complementarity between participating in the cooperative issuance of coupons and advertising investment; 4) when settled merchants can rely more on advertising and marketing to increase demand, cooperative issuance of coupons will increase the actual price paid by consumers and hence hurt consumer welfare.
• Zhou, Xianbo and Zhuoran Chen, 2023. The Impact of Uncertainty Shocks to Consumption under Different Confidence Regimes Based on a Stochastic Uncertainty-in-Mean TVAR Model. Sustainability, 15(4): 3032. Link, PDF.
  • This paper focuses on how an exogenous uncertainty shock influences domestic and foreign consumption under different consumer confidence regimes. By specifying a threshold Vector Auto-regressive model with the consumer confidence as the regime variable, we find that low consumer confidence will exacerbate consumption both at home and from abroad, but it will benefit the export, compared to high consumer confidence. We then use the forecast variance decomposition to confirm the difference of exogenous shock in the interpretation of the change of endogenous variables under different consumer confidence regimes. Finally, we conduct an international comparison by comparing Chinese results with US results using identical methods and find consumer confidence is much more influential in the US than China.

Completed working papers

• Does the rapid urban technological progress aggravate the demand for rural products in China? — Based on the price effect and the common prosperity effect.
  • This paper fixates on technological progress and consumption demand for rural and urban products. We divide the impact of technological progress into two channels: the price effect affected by the substitution elasticity and the common prosperity effect influenced by the minimum consumption. We find that the relative increase in the technological progress of the urban sector, compared with that of the rural sector, restrains the increase in the proportion of consumption demand for rural sector of China through the price effect and the common prosperity effect. Our findings help to explain why the proportion of rural products’ demand in China has declined over the past 40 years, but the rate of decline gradually slowed down. This paper further analyzes the spatiotemporal heterogeneity of these two effects using Mean Observation OLS method and delves into the mechanism behind these two effects through stochastic frontier analyses.
• Financial Crisis and Financial Network Stability—Based on the perspective of risk contagion in the financial system.
  • This paper is built on Acemoglu et al (2015) and concerned with the financial crisis and financial network stability. I attempt to find the origin of the financial crisis by modeling a financial network composed of several banks, and studying the nature of such a financial network in various situations. I find that the degree of financial risk contagion strongly depends on the structure of the financial network: if the magnitude of the negative shock is lower than a certain threshold, the closer financial network will show greater stability; however, when the negative shock exceeds the threshold, the dense financial network structure will become a fertile ground for brewing financial turmoil.
• How does WHO warn the world? — Based on two-stage dynamic Bayesian persuasion game.
  • This paper is about how the World Health Organization (WHO) could effectively warn the world. This example was first raised by Alizamir et al (2020) who formulated the problem as a dynamic Bayesian persuasion game. In this model I consider an agency (WHO) who privately receives early information about recurring harmful events and issues warnings to induce an uninformed stakeholder (governments) to take preemptive actions. The agency’s decision to issue a warning depends on its reputation, i.e., the stakeholder’s belief in the accuracy of the agency’s information, and the agency faces a trade-off between eliciting a proper response today and maintaining its reputation to elicit responses to future events. I find that the agency sometimes strategically misrepresents its advanced information about a current threat to cultivate its future reputation: the agency downplays the risks when its reputation is low and exaggerates the threat when its reputation is high.

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