NullVoid

Political Uncertainty and Corporate Investment Cycles

ET — Tue, 19 Jun 2012 06:39:05 +0000

I read this paper from Journal of Finance (2012 Feb issue). It tells an interesting story: during election years, firms reduce investment expenditures by an average of 4.8% relative to nonelection years, across nations, controlling for growth opportunities and economic conditions.

The authors explained the observation with political uncertainty. I wonder if more can be done on this. Does political uncertainty affect individual firms or the economy in general? Would these elections also affect end consumers/voters? There seems to be a lot of interesting questions related to this topic.

A Message from a Student

ET — Mon, 21 May 2012 02:22:24 +0000

Dear Prof. Zhang,

I thoroughly enjoyed your isom 2010 course this semester! I have been so inspired by you and this course has made me more of a proactive and outside the box thinker! I had joined the uni with the ambition of hopefully becoming an entrepreneur pursuing econ and finance as a major but now face a dilemma because this course has sparked my interest in Information systems due to not only the knowledge learned but also the skills gained! Thank you so much!

Why SOPA is Bad to Innovation

ET — Wed, 18 Jan 2012 08:26:06 +0000

SOPA stands for Stop Online Piracy Act, which is a legislation introduced by the US House of Representatives. Websites like Google and Wikipedia believe this is Internet Censorship and it will cripple the Internet.

Wikipedia showed a blackout page today to protest, and it will last for 24 hours.

In my paper with Feng Zhu (You can download the paper from here.) published in June 2011 in the American Economic Review (AER), we studied the effect of blocks of the Chinese Wikipedia on incentives to contribute.

A direct effect is obviously that many people can no longer contribute to Wikipedia.

The following figure suggests that contributions from China reduced significantly after the block.

The bar chart further compares the contributions from different regions before and after the block.

An indirect effect is that people who were not directly blocked also reduced their contribution significantly. In the paper we estimate that the reduction in contribution from those who are outside China is more than 40% within the 4 weeks after the block.

The next figure shows the number of new contributors. It can be clearly seen that each block (shown in shaded areas) significantly reduced new contributors.

The lesson learned: information needs to be free. Legislation not well thought out may bring unintended consequences.

TINTIN!

ET — Tue, 04 Oct 2011 12:53:22 +0000

Blue

ET — Wed, 24 Aug 2011 14:41:00 +0000

Colors

ET — Wed, 24 Aug 2011 14:33:27 +0000

Boat & Books

ET — Wed, 24 Aug 2011 14:30:30 +0000

The Myth

ET — Thu, 16 Jun 2011 13:49:22 +0000

<br />

My Myth

Many ions ago there lived a powerful and beautiful goddess
called Claudia. Claudia was gentle and kind and she lives in a village full of
gods that sat on top of a cloud which floated about in the turquoise blue sky. Claudia was the goddess of weather so she
controlled the wind, sun and the clouds. Every morning she would go to the
middle of the village and make the sun rise, and then she would decide what
weather she wanted.

Meanwhile in the underground was Zeuseus, a big and evil dragon
with eyes as black as coal. Zeuseus lived in a castle that looked like haunted
house. Zeuseus was mad that no flowers ever grew in the underground even after
he planted some seeds because there was no water in the underground.

One day Zeuseus flew out of the underworld went to fly around
the forest he saw a poster stuck on a bark of a tree. On it said:

Servants needed, please call Claudia The Weather God at
456123789 or email a message before 30^{th January} Thank You!

Just after Zeuseus read the poster on
the bark of the tree he reached out and grabbed the poster of the tree, and
flew back to his house.

When Zeuseus went back home he wrote down his evil plan to steal
the rain clouds from Claudia into his notebook this is what he wrote:

Plan to steal the rain
clouds

Dress up as a god and call Claudia to say I take the job to be a
servant.

Then when sheâ€™s not looking I will coax the clouds to follow me
or I pretend I need to borrow the rain clouds but never give the rain clouds
back.

When he finished writing his plan he stepped back to admire his
work then he remembered the purpose of writing the notes.

Zeuseus disguised himself with his magic, called Claudia and
flew of to Claudiaâ€™s palace in the village of gods floating in the clouds.

Zeuseus was warmly welcomed when he arrived at the palace, and
just as he hoped he was working in the room with the balcony where the rain
clouds hanged about and there were all asleep! Zeuseus couldnâ€™t believe his
luck.

When he made sure no
one was looking he changed back to his real form, grasped onto the clouds and
flew back to his underground home.

When Zeuseus got home he tried to make the clouds to do what he
wanted them to do but the clouds always refused and did the opposite of what
Zeuseus wanted them to do.

Just as Zeuseus was about to give up, a letter slipped in from
the Mail box hole, Zeuseus picked it up and opened it:

Dear Zeuseus,

I know that you stole my rain clouds and I would like to have
them back. You could borrow them for nine months if you would not cause any
more trouble with the weather.

Thank you!!!

Claudia

Zeuseus wrote a letter back:

Dear Claudia,

I would not like to borrow your clouds because they wouldnâ€™t
listen to me!!!!!!!!!!

Zeuseus

After Zeuseus finished writing the letter he sent the clouds and
the letter to Claudia.

And that is how sunny days and rainy days were created.

The
end

Best Birthday Gift

ET — Fri, 03 Jun 2011 14:39:31 +0000

It was my birthday on June 1 (yes, the children’s day, that’s why I don’t get old).

My friend John was visiting, he was bored so dragged me to watch the Horse Race in Happy Valley.

The point is really not watching horse. We were busy checking the statistics of the horses and played a few hands. I typically don’t do gambling because I always believe it is a form of “stupidity tax”. This time, however, I played. Of course, we lost.

Just before we were ready to leave, I got the email (can’t imagine the days without iphone). It was the acceptance letter of my paper by Management Science.

So I guess this is the best birthday gift ever. I started working on that paper in 2003, then presented it in 2005. Presented it as my job market paper around the world (literally), and it won me quite a number of great job offers. However, it was such a long journey to publish it. It stayed at one particular journal for 18 months before I got two very irresponsible reviews.

Probably we were one of the first to write on the topic, when we first submitted it in 2006/2007 the reviewers could hardly understand what we were talking about. After several years of extensive study by many other colleagues, finally the value of the paper gets recognized. When we submitted it to MS in 2010, one of the reviewers said:”This is a very timely study to look at dynamic features of keyword auctions, while the majority of the literature still relies on static models.”

Some friends asked me if the reviewers knew the “inside information” of my birthday. I guess not, even if they do, it would be hard to coordinate so that the editors can send out the notification exactly on that day.

For the record, my dear reviewers, please do not wait to surprise me only on my birthdays. Surprise me now! Surprise me any time!

Blue Army Red Army

ET — Tue, 17 May 2011 01:59:49 +0000