Prof. Yuk-fai FONG
Academic & Professional Qualification
- PhD: Boston University
- Master: Chinese University of Hong Kong (MPhil)
- Bachelor: Chinese University of Hong Kong (BSSc)
Professor Yuk-fai Fong is a Professor of Management and Strategy, with joint appointment in Economics. Prior to HKU, he has taught at Kellogg School of Management and Hong Kong University of Science and Technology. Professor Fong received his BSSc and MPhil in Economics from Chinese University of Hong Kong, and PhD in Economics from Boston University.
His research interests include Industrial Organization, Competition Policy, Dynamic Games, and Applied Microeconomic Theory. He serves as an Editor for B.E. Journals of Theoretical Economics and Associate Editor for International Journal of Industrial Organization. His research has appeared at leading international journals such as Journal of Political Economy, Review of Economics Studies, RAND Journal of Economics, Journal of Economic Theory, International Economics Review, Games and Economic Behavior, Journal of Industrial Economics, and Journal of Economics and Management Strategy. He has consulted for companies such as Shell Oil Company and Platinum Guild International, and is an academic affiliate with Compass LexEcon. Professor Fong won the HKUST Franklin Prize for Teaching Excellent (MBA Required Courses) in 2017, and was a finalist for the award in 2013, 2014, and 2016.
- HKU: EMBA Strategic Management, EMBA Managerial Economics, MBA Managerial Economics, MBA Python for Managers and Strategists, MEcon Antitrust Economics and Competition Policy; Undergrad Strategic Management
- HKUST: EMBA Orientation Program, EMBA Homecoming Module, EMBA Managerial Microeconomics, Kellogg-HKUST EMBA Talk, MBA Opening Module, MBA Homecoming, MBA Managerial Microeconomics, ExecEd Value Creation, PhD Microeconomics, PhD Industrial Organization, MSc Topics in Industrial Organization, MSc Antirust Economics and Competition Policy
- Kellogg: MBA Strategy and Organization
Industrial Organization, Competition Policy, Dynamic Games, Applied Microeconomic Theory
- “The Identification of Unobservable Independent and Spousal Leisure”, (with Junsen Zhang), Journal of Political Economy 109 (1), February 2001, 191-202.
- “When do Experts Cheat and Whom do They Target?”, RAND Journal of Economics, 36 (1), Spring 2005, 113-130.
- “Compensation for Quality Difference in a Search Model of Money”, (with Balázs Szentes), International Economic Review, 46 (3), August 2005, 957-971.
- “On the Optimal Degree of Cooperation in the Repeated Prisoner’s Dilemma with Side Payments”, (with Jay Surti), Games and Economic Behavior, September 2009, 67 (1), 277–291.
- “Private Information of Nonpaternalistic Altruism: Exaggeration of Generosity and Reciprocal Behavior”, B.E. Journal of Theoretical Economics (Advances), 9(1), 2009, Article 1. (One of two finalists, 2008 Arrow Prize for Junior Economists)
- “Bidding in a Possibly Common-Value Auction”, (with Daniel F. Garrett), Note, Games and Economic Behavior, 70 (2), November 2010, 494-501.
- “Loyalty Rewards Facilitate Tacit Collusion”, (with Qihong Liu), Journal of Economics and Management Strategy, 20 (3), Fall 2011, 739–775.
- “Product Quality, Reputation, and Market Structure”, (with Jim Dana), International Economic Review, November 2011, 52(4), 1059–1076.
- “Long-lived Consumers, Intertemporal Bundling and Collusion”, (with Jim Dana), The Journal of Industrial Economics, December 2011, 59(4), 609–629.
- “On the Role of Verifiability and Commitment in Credence Goods Markets”, (with Ting Liu and Donald J. Wright), International Journal of Industrial Organization, November 2014, 37, 118-129.
- “When Does Aftermarket Monopolization Soften Foremarket Competition”, (with Jin Li and Ke Liu), Journal of Economics and Management Strategy, Winter 2016, 25(4), 852–879.
- “Information Revelation in Relational Contracts”, (with Jin Li), The Review of Economic Studies, January 2017, 84 (1), 277–299.
- “Relational Contracts, Limited Liability, and Employment Dynamics”, (with Jin Li), Journal of Economic Theory, May 2017, 169, 270-293.
- “Signaling by an Informed Service Provider”, (with Frances Xu Lee), Journal of Economics and Management Strategy, Winter 2017, 26 (4), 955-968.
- “Liability and Reputation in Credence Goods Markets”, (with Ting Liu), Economics Letters, May 2018, 166, 35-39.
- “Using Customer Service to Build Clients’ Trust”, (with Xiaoxiao Hu, Ting Liu and Xiaoxuan Meng), The Journal of Industrial Economics, March 2020, 68 (1), 136-155.
- “Negotiated Block Trade and Rebuilding of Trust”, (with Pak Hung Au and Jin Li), International Economic Review, May 2020, 61(2), 901-939.
Service to the University/Community
- Editor, B.E. Journals of Theoretical Economics, 2012- (Associate Editor, 2006-2012)
- Associate Editor, International Journal of Industrial Organization, 2009-
- Associate Editor, Taiwan Economic Review, 2012-2014
- Director, Center for Experimental Business Research, HKUST, 2013-2018
- Nominator, China Economic Prize, for National Economic Foundation, China, 2016, 2017, 2018
- Co-chair, 12th Workshop on Industrial Organization and Management Strategy, 2016
- Chair, HKUST Workshop on Industrial Organization, 2017, 2018
- Executive Committee Member, Hong Kong Economic Association, 2017-
- Advisory Committee Member, Curriculum Development Council and Hong Kong Examinations and Assessment Authority Committee on Economics (Senior Secondary), 2013 –2017.
- Advisory Committee Member, Diploma of Secondary Education Economics Subject Committee in 2013-2015.
We investigate the impact of corporate governance on customers' trust using a dynamic model of experience‐goods firm. In the optimal equilibrium, customers' trust in the firm is linked to its behavior in the market for corporate control, so that the controlling shareholder has incentives to ensure high product quality while noncontrolling shareholders' interests are protected. Following a trust‐damaging event, turnover of the controlling share block restores customers' trust and enhances total shareholder value. Our analysis identifies an endogenous cost of corporate control, offers implications for the control premium, and provides a novel rationale for the separation of ownership and control.
It is well known in the credence‐good literature that in an expert‐client relationship, under the Liability assumptions, clients have to reject the expert’s serious‐treatment recommendations with a positive probability to ensure that the expert honestly recommends treatments. Inefficiency arises because some socially efficient treatments are not provided. We show that the expert can enhance clients’ trust, or acceptance rate of the serious treatment, by providing intrinsically socially inefficient customer service upon recommending the serious treatment. Enhanced clients’ trust leads to higher efficiency and higher profit for the expert. However, trust cannot be enhanced by providing customer service with different timing.