Mr Weihan Ding

Mr Weihan Ding

PhD Candidate in Economics

Department of Economics

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Key Expertise
Political Economy

About me

Job Market Placement
Lecturer in Economics, University of Exeter 2019-2021

Research interests
Political Economy (primary)
Microeconomic Theory, Development and Growth, Corporate Finance (secondary)

Job market paper
Propaganda, Patriotic Protest, and Diplomatic Persuasion

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When diplomatic disputes loom, governments often instil hostility in their own citizens to encourage protests against other countries. Promoting protests, however, may cause unrest and escalation of disputes. This paper provides a theory why governments nevertheless have incentive to do so. The foreign government will be more likely to concede if the general public in the home country protests, but when observing a protest, she cannot distinguish whether the general public or only nationalists are protesting. For her to concede after a protest, it must be very likely that the general public supports the protest. The home government chooses its propaganda balancing the benefit of more concessions versus the cost of more unrest. I show that because generating hostility is costly, a government may prefer its people to have 'restrained patriotism'—intermediate responsiveness to international controversies. I also show that governments benefit most from inciting protests when: 1) there is intermediate level of media freedom; 2) the government does not have total control over the society.

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Publications and additional papers

“Strategic Disclosure, Primary Market Uncertainty, and Informed Trading” (with Xingchen Zhu), working paper, 2018

Abstract: We study the optimal disclosure policy in security issuance using a Bayesian persuasion approach. An issuer designs a signal to persuade an investment bank to underwrite. The bank forms a posterior on the basis of the signal and makes its underwriting and retention decisions. When there is no demand uncertainty, a partially informative disclosure is enough to curb primary market underpricing due to informed sales by the underwriter in the secondary market. When demand is uncertain, the underwriter may shy away because of more retention than his privately optimal level and larger losses due to increased total cost of capital. The optimal disclosure can solve such hold-up problem resulting from weak demand and induce the bank to underwrite. We derive predictions on the effects of the issuer's fundamentals, the underwriter's cost of capital, the demand uncertainty, and the market liquidity on the informativeness of the optimal disclosure. Our model not only captures the adverse selection problem in the originate-to-distribute lending model, but also rationalizes the phenomenon that arrangers may be willing to retain large and costly stakes in leveraged loan syndication. Finally, if viewed as an extant blockholder, we show that the underwriter may exert governance by exit to promote more transparent disclosure by the issuing firm.

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Professor Philippe Aghion
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Professor Philippe Aghion
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Contact information


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+44(0) 7784676612

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Office Address
Department of Economics,
London School of Economics and Political Science,
Houghton Street, London WC2A 2AE