海角社区

Title: When Historical Prices Become Transparent, Must Consumers Be Better Off?

Speaker: Professor Xi Li, The University of Hong Kong

Time: 10:00 AM, May 20, 2025

Location: Room 319

Abstract:
When Historical Prices Become Transparent, Must Consumers Be Better Off? No. Consider a seller selling a product to consumers over time. Consumers are uncertain about the quality of the product and rely on past product reviews to make inferences about it. A positive review may result from either a high product quality or a low product price. When consumers cannot observe historical prices, they are unable to tell apart a high product quality from a low product price, which gives the seller an opportunistic incentive to distort its prices downward to boost its product review and, subsequently, late-arriving consumers' perception of product quality. When consumers observe historical prices, however, they can discern these two dimensions and make correct inferences about product quality, and the seller's opportunistic incentive disappears. As such, information about historical prices drives up product prices which may hurt consumers. Collectively, this study underscores the unintended consequences of disclosing historical product prices.

Speaker Profile:

Professor Xi Li, a rising star in algorithmic economics at HKU's Faculty of Business and Economics, specializes in: Economic analysis of AI and recommendation systems, algorithmic pricing strategies, and digital consumer protection.

His pioneering work has earned:
• 2021 Marketing Science Young Scholar distinction
• 2024 AMA "Top 50 Most Productive Marketing Scholars" recognition
• Publications in all FT50 journals (Management Science, JMR, JCR)