Research Interest
- Game Theory, Stochastic Learning in Games, Bounded Rationality, and Evolution of Social Behavior
Publications
- Endogenous Timing, Market Research, and Demand Uncertainty, Fei Shi, Operations Research Letters, forthcoming.
Abstract: This paper develops an endogenous timing model where market demand is uncertain but it is possible to conduct market research before production. If market research has either high or low costs, the model generalizes and encompasses the classical results in Hamilton and Slutsky (1990) and Sadanand and Sadanand (1996). For intermediate market research costs, however, a qualitatively new scenario emerges, where every pure-strategy equilibrium involves endogenous leadership.
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- Choice-induced preference change and the free-choice paradigm: A clarification, Carlos Alós-Ferrer and Fei Shi, Judgment and Decision Making, Vol. 10, No. 1, pp. 34–49, January 2015.
Abstract: Positive spreading of ratings or rankings in the classical free-choice paradigm is commonly taken to indicate choice-induced change in preferences and has motivated influential theories as cognitive dissonance theory and self-perception theory. Chen and Risen (2010) argued by means of a mathematical proof that positive spreading is merely a statistical consequence of a flawed design. However, positive spreading has also been observed in blind choice and other designs where the alleged flaw should be absent. We show that the result in Chen and Risen (2010) is mathematically incorrect, although it can be recovered in a particular case. Specifically, we present a formal model of decision making that satisfies all assumptions in that article but implies that spreading need not be positive in the absence of choice-induced preference change. Hence, although the free-choice paradigm is flawed, the present research shows that reasonable models of human behavior need not predict consistent positive spreading. As a consequence, taken as a whole, previous experimental results remain informative.
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- Long-run Technology Choice with Endogenous Local Capacity, Fei Shi, Economic Theory, Vol 59, Issue 2, pp. 377-- 399, June 2015.
Abstract: We develop a two-stage, two-location model to investigate long-run technology choice with endogenous capacity constraints. Rational managers determine the maximum capacities (and mobility constraints). Then, boundedly rational agents play a coordination game possibility to migrate. We consider two alternative strategy sets and two different objective functions for the managers and show that they affect the long-run technology choice in a non-trivial way. If the managers only care about efficiency in their respective locations, either coexistence of conventions or global coordination on the risk-dominant equilibrium will be selected, depending on the (effective) capacities of both locations. If they are concerned with scale and can choose mobility constraints, global coordination on the risk-dominant equilibrium without mobility will be selected in the long run. We then change the basic interaction to a n×n pure coordination game where mis-coordination results in zero payoff, and show that, regardless of the constraint choices, all the agents will coordinate on the most efficient equilibrium.
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- Comment on "On the Co-existence of Conventions" [J. Econ. Theory 107 (2002) 145–155], Fei Shi, Journal of Economic Theory, Vol 48, No 1, pp. 418-421, January 2013.
Abstract: We show that the main result in Anwar (2002) is incorrect. When the payoff of the risk-dominant equilibrium is large enough, the threshold value of the effective capacity for selecting the co-existence of conventions is larger than the one claimed in Anwar (2002).
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- Choices and Preferences: Evidence from Implicit Choices and Response Times, Carlos Alós-Ferrer, Dura-Georg Granic, Fei Shi, and Alexander K. Wagner, Journal of Experimental Social Psychology, Vol. 48, No. 6, pp. 1336-1342, November 2012.
Abstract: We present a new experimental paradigm where choice-induced preference change is measured for alternatives which are never compared directly, but rather confronted with other alternatives in a way which keeps choices predictable without exogenously manipulating them. This implicit-choice design improves on the free-choice paradigm, avoiding the recently criticized selection bias. Rating and ranking spreads in two experiments show that preference-based choices feed back into and alter preferences even if choices are not directly among similarly evaluated alternatives. In agreement with recent brain-imaging evidence, response time measurements for direct choice pairs in our experiments indicate that reappraisal processes are already triggered during decision making, with larger post-choice spreads (sharper attitude change) being associated to quicker decisions.
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- Imitation with Asymmetric Memory, Carlos Alós-Ferrer and Fei Shi, Economic Theory, Vol. 49, No. 1, pp. 193-215, January 2012.
Abstract: Models of learning in games based on imitation have provided fundamental insights as the relevance of risk-dominance equilibria or perfectly competitive outcomes. It has also been shown, however, that the introduction of nontrivial memory in those models fundamentally alters the results. This paper further considers the effect of asymmetric memory length in the population. We focus on two classical results and find that, while asymmetric memory crucially affects equilibrium selection in coordination games, it reinforces the stability of perfectly competitive outcomes in oligopoly games. The latter result is generalized to aggregative games and to finite-population ESS in symmetric games.
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Working Papers
- Endogenous Timing with Demand Uncertainty, Fei Shi, 2012.
Selected Works in Progress
- A Network of Time-inconsistent Consumers, with Jianxia Yang.
- Bubbles and Imitation, with Long Kang and Yong Sui.
- Group Buying and Social Network, with Yong Sui and Jianxia Yang.
- Cournot Competition, Imitation, and Information Network, with Yong Sui and Boyu Zhang.