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Dr. Dongni Zhu’s Co-authored Paper Accepted by AER

Date:2019-06-24


Dongni Zhu   Assistant Professor, School of Economics 


Ph.D. in Economics, Texas A&M University


Research Interest: Industrial Organization Theory


Recently, assistant professor Dongni Zhu had her paper titled 'Does Strategic Ability Affect Efficiency? Evidence from Electricity Markets' accepted by one of the top 5 economic journals, American Economic Review. The paper, co-authored with Ali Hortaçsu (Professor of Economics at the University of Chicago, Member of the American Academy of Arts and Sciences and Fellow of the Econometric Society), Steven L. Puller (Professor at Texas A&M University) and Fernando Luco (Assistant Professor at Texas A&M University), is the third paper of SOE faculty that has been accepted for publication by the top 5 economics journals in this year and also the 6th paper accepted by AER by SUFE faculty members since 2009.

Through the international-oriented economics education and research reform over the past 15 years, the quantity and quality of the papers published by the economics discipline of SUFE in leading international journals have achieved a leap-forward development, which greatly enhances the school's international academic reputation. According to the latest Tilburg University Economics Ranking, SUFE ranked 35th in the world in the year 2018, presenting a notable upward trend. This marks a great advancement from 14 years ago and a robust rising tendency of the economics discipline.

As a newly hired tenure-track assistant professor, Dr. Dongni Zhu is also an outstanding graduate of SOE, who has witnessed the overall reform of economics education since 2004. She joined the school as an undergraduate student in 2003, and enrolled in SOE's Integrated M.A. and Ph.D. Program in 2007. In 2011, she went to Texas A&M University for doctoral degree, and returned to China in 2016. At the beginning of 2019, she formally joined SOE as a faculty member. Professor Zhu owes much of her success to the international training concept that SOE has been pursuing. 'I feel that I received world-class education at the School of Economics. It opened up my horizon and made me seek for constant self-improvement. This is the biggest help the school has given me'.

More to learn about the paper:


Does Strategic Ability Affect Efficiency? Evidence from Electricity Markets


Ali Hortaçsu, Fernando Luco, Steven L. Puller, Dongni Zhu


Abstract: Oligopoly models of price competition predict that strategic firms exercise market power and generate inefficiencies. However, heterogeneity in firms' strategic ability also generates inefficiencies. We study the Texas electricity market where firms exhibit significant heterogeneity in how they deviate from Nash equilibrium bidding. These deviations, in turn, increase the cost of production. To explain this heterogeneity, we embed a Cognitive Hierarchy model into a structural model of bidding and estimate firms' strategic sophistication. We find that firm size and manager education affect sophistication. Using the model, we show that mergers that increase sophistication can increase efficiency despite increasing market concentration.

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