Professor Yan Ji from HKUST School of Business and Management, is a financial economist whose research focuses on finance and macroeconomics, especially their connection to industrial organization. He brings to the post of Liwei Huang Professor a record of award-winning, impactful research that uses cutting-edge theory to guide industry practice.

Professor Ji obtained a B. Eng. from Tsinghua University in 2009 and a Ph.D. in Economics from the Massachusetts Institute of Technology in 2017. In the same year, he joined HKUST Business School as Assistant Professor of Finance. Obtaining early tenure, he was promoted to Associate Professor of Finance just 5 years later, in 2022. 

Since joining the School, Professor Ji has co-authored a series of papers published in top finance and economics journals, along with numerous seminar and conference presentations. He uses economic theories, structural models, and micro data to advance two key research agendas. One is to analyze the implications of imperfect product market competition for asset prices. The other is to understand important questions related to financial inclusion, resource misallocation, income inequality, and economic growth.

Professor Ji’s scholarly contribution lies at the intersection of asset pricing and industrial organization. Classical asset pricing models consider firms operating in perfectly competitive product markets, in which each firm has only a negligible influence on other firms’ behavior or the aggregate economy. However, these models do not sufficiently describe firms’ behavior in the modern economy, in which a small number of “superstar” firms tend to control a large share of the market.

Motivated by the widespread increase in market concentration, Professor Ji and his co-authors propose the first elements of tractable dynamic asset-pricing models in which firms engage in a dynamic game of strategic price competition, which generates a rich set of realistic peer interactions such as implicit collusion and the price war. These models explicitly consider key organizational features of industries, highlighting the role of strategic competition among market leaders in determining industry dynamics and aggregate fluctuations. This research not only resolves longstanding financial market anomalies at the industry level, such as the profitability premium, the financial distress anomaly, and the profitability-leverage puzzle, but also provides rich insights into firms’ credit risk and industries’ financial stability.

Professor Ji’s publications and ongoing research have critical implications for the future of real businesses and economies. In a recent working paper, Professor Ji and his co-authors address the pressing topic of AI. Their theory demonstrates that AI algorithms can intelligently collude with each other to achieve supra-competitive profits, even without implicit coordination. Such algorithmic collusion implies that in a capital market where AI-powered trading is prevalent, perfect price informativeness becomes unattainable.

Professor Ji’s research has won considerable acclaim. Among myriad honors, he received the Best Paper Award at the China International Conference in Macroeconomics, the Midwest Finance Association’s AAII Award for Outstanding Paper on Investments, the Best Paper Award on Asset Pricing at the Northern Finance Association Annual Conference, the PwC 3535 Finance Forum Best Paper Award, and the Marshall Blume Prize in Financial Research awarded by the Rodney L. White Center of the Wharton School.

In further recognition of Professor Ji’s impactful contribution to research and practice in finance, HKUST is proud to name him Liwei Huang Associate Professor of Business.