Network effects are commonly seen among people engaging in social interactions, and come about from the “payoff externality”, where someone’s payoff depends on both their own actions and the actions of others. For example, an individual is more likely to adopt a program or application if their friends and colleagues already use it. Because network effects ... Read More

With a wealth of products and services at our fingertips in the modern marketplace, online reviews have become an invaluable source of information for consumers. This is especially true for “experience goods” such as a haircut or a hotel stay, whose true quality cannot be determined before purchase. Many retailers post user-generated product reviews online ... Read More

Deciding how much to grow can be difficult for farmers in developing countries, who largely operate without crucial market information. Governments and non-governmental organizations (NGOs) are attempting to address this knowledge gap, but how widely should they deliver such information to the maximum benefit of farmers? Is wider information distribution ... Read More

Peers and trend-setters have a powerful say in what products we decide to buy, particularly on online social media platforms. Naturally, this means that firms must consider the influence of network connections on purchase behaviors when designing pricing strategies. In doing so, they must consider when consumers decide to buy a new product—some consumers ... Read More

Peers and trend-setters have a powerful say in what products we decide to buy, particularly on online social media platforms. Naturally, this means that firms must consider the influence of network connections on purchase behaviors when designing pricing strategies. In doing so, they must consider when consumers decide to buy a new product—some consumers ... Read More

Social networks are a good example of the complexity of human relationships, where a person’s daily life decisions are regularly affected by the choices of their friends. This challenges extensive research on the economics of networks, in which individual activities have global impacts on the activities of others. In short, the externalities of network ... Read More

When confronted with a long line of people outside a restaurant, do you join the back of the queue or choose to dine elsewhere? Whilst this may seem like a snap judgment, there is more to the decision-making process than meets the eye. In fascinating work, HKUST’s Ying-Ju Chen and colleagues looked at how patience, service quality information, and ... Read More

With the rise of e-commerce, suppliers can now reach consumers directly through channels such as online platforms. On the surface, it might seem that this “encroachment” can only be detrimental to the traditional retail channel. However, HKUST’s Ying-ju Chen and colleagues reach a different conclusion. In important new work, they show that encroachment may ... Read More

The decision to disclose product information to potential customers is something that must be considered by sellers. Common methods that are used to present quality information include advertisements, free samples, product labels, and so on. Alternatively, for various reasons, a seller might choose to reduce their investment in advertising or limit certain ... Read More

In the global supply chain, retailers commonly source manufacturers through “middlemen.” Unfortunately, these intermediaries often collude with unethical manufacturers to collect rebates that are “hidden” from retailers. Due to the covert operations involved, this problem has received very little attention. In instrumental new work, Ying-Ju Chen from HKUST ... Read More