Topic:A Model of Two Learning Processes

Lecturer:Zheng Gong

Zheng Gong is an assistant professor at the Department of Marketing, School of Economics and Management, The Chinese University of Hong Kong (Shenzhen), and received his PhD in Management from the Rotman School of Management, University of Toronto in 2022. Prior to that, he received a bachelor's degree in astronomy and economics from Peking University and a master's degree in economics from the Spanish Center for Monetary and Financial Studies. His research interests include quantitative marketing, social media, digital economy, industrial organization, and applied microeconomic theory. His research has been published in top academic journals such as Management Science, and he has received prestigious academic awards, including the Sheth Foundation ISMS Doctoral Dissertation Award and EARIE's Young Economist Dissertation Award.

Abstract:

Many studies have shown that consumers, before deciding whether to purchase a new product or service, draw inferences from the choices of other consumers and actively acquire information from other sources, We propose a novel model that integrates two learning processes: observational learning and active learning. Building upon the classic observational learning framework, this model allows each consumer to make dynamic choices of information acquisition. We first analyze consumers' learning behavior in the presence of a given price, and then we endogenize the seller's dynamic pricing strategy in response to the two learning processes of consumers. We show that a forward-looking seller may find it optimal to sacrifice short-term profits by setting a higher price to induce active learning, thereby improving the information transmitted through observational learning and ultimately gaining higher expected future profits. We also investigate consumers' learning behavior, the seller's dynamic pricing strategy, and long-run market learning outcomes when the speed of information acquisition increases with sales.

Time:4:00-5:30p.m,September 19th,2024

Venue:B336,Zhixin Building,Central Campus