Speaker: Yang Zhongchao, Distinguished Associate Research Fellow (Wuhan University)
Host: Xie Cong, Assistant Professor (China Institute of Economics, Liaoning University)
Guest Introduction: Hou Shangdi, Assistant Professor (China Institute of Economics, Liaoning University)
Time: 10:00-11:30 a.m. (Beijing Time), Friday, October 17, 2025
Venue: Conference Room on the 1st Floor, Wuzhou Garden, Chongshan Campus, Liaoning University
Online Address: Tencent Meeting ID: 471-691-522
Abstract:Using a large language model (LLM) to analyze online consumer reviews, we find that when customers observe a firm charging a lower price than they previously paid for the same item, they feel antagonized and give the firm low ratings, resulting in reputation costs for the firm. In particular, a firm's reputation costs are higher if it adjusts its price more quickly than other firms. Motivated by this empirical evidence, we develop a model that characterizes the optimal timing of price adjustments for firms, offering a microfoundation for price stickiness. In an environment with information frictions regarding how an aggregate shock affects the economy, individual firms face uncertainty about when their peers will adjust prices. This synchronization risk leads all individual firms to rationally choose to postpone price changes. Our model predicts both synchronized and unsynchronized price adjustments, depending on the degree of information frictions. The model provides a number of other predictions that are consistent with the evidence documented in the literature.
Speaker Profile
Yang Zhongchao is currently a Distinguished Associate Research Fellow at the School of Economics and Management, Wuhan University. He obtained his PhD in Economics from the Hong Kong University of Science and Technology in 2021.
His main research fields are macroeconomics and finance. His research results have been published in international journals such as Journal of Financial Economics and Economic Modelling. Currently, he presides over the Youth Project of the National Natural Science Foundation of China.
He has won a number of academic honors, including the title of PwC Strategy& Young Scholar, the 2024 PwC 3535 Best Paper Award, the 2024 Excellent Paper Award of the China Finance Association, and the 2025 Excellent Paper Award at Tsinghua University's "Big Data and Market Microstructure Conference".
