Difei Geng, an assistant professor in the Department of Economics at the Walton College, has had his paper “International Effects of National Regulations: External Reference Pricing and Price Controls” accepted for publication in the Journal of International Economics.
He co-authored the research with Kamal Saggi, dean of social sciences in the College of Arts and Science and the Frances and John Downing Family Professor of Economics at Vanderbilt University.
Geng holds a Ph.D. in economics from Vanderbilt University, a master of arts degree in economics from both Southern Methodist University and Nankai University and a bachelor of arts in economics from Tianjin University of Finance and Economics.
From the paper’s abstract:
“Under external reference pricing (ERP) the price that a government permits a ﬁrm to charge in its market depends upon the ﬁrm’s prices in other countries. In a two-country (home and foreign) model where demand is asymmetric across countries, we show that home’s unilaterally optimal ERP policy permits the home ﬁrm to engage in a threshold level of international price discrimination above which it is (just) willing to export. If the ﬁrm faces a price control abroad or bargains over price with the foreign government, an ERP policy can even yield higher home welfare than a direct price control.”