Personalized Pricing, Network Effects, and Corporate Social Responsibility

Speaker：Liyan Yang (Professor, University of Toronto)

Host：Kang Junqing, Assistant Professor, Lingnan College

Time and Date：15:00, Aug. 16, 2023

Venue: Wang Daohan Conference Room(101), Lingnan Hall

Language:  Chinese

Abstract:

We propose a theory of corporate social responsibility (CSR) by linking it to a firm’s product market. In our model, the firm’s product exhibits network effects whereby its value increases with the number of consumers who purchase it. Moreover, with advancements in technology and big data, the firm can adopt personalized pricing for each consumer. We show that such a firm could use CSR as a commitment device for low product prices, which helps overcome the coordination problem among consumers and increases firm profits, thus supporting the notion of “doing well by doing good”.

Profile of the speaker:

Liyan Yang is a Professor of Finance and Peter L. Mitchelson/SIT Investment Associates Foundation Chair in Investment Strategy at the Rotman School of Management, University of Toronto. His research interests are in financial markets, asset pricing, and behavioral finance. He received PhD in economics from Cornell University in 2010. He is currently serving as an associate editor at Journal of Economic Theory, Journal of Finance, Journal of Economic Dynamics and Control, and Management Science. His research has appeared in Journal of Economic Theory, Journal of Financial Economics, Journal of Finance, and Review of Financial Studies, etc. Yang has received the 2016 JFQA William F. Sharpe Award for Scholarship in Financial Research, the 2016 Bank of Canada’s Governor’s Award, and the 2015 Roger Martin Award for Excellence in Research, among others.