About

Wenqiang Xiao is a Professor of Technology, Operations, and Statistics at NYU Stern School of Business, where he joined as an Assistant Professor in July 2006. He holds the title of Toyota Motor Corporation Term Professor of Operations Management. Professor Xiao's research interests are primarily focused on designing and evaluating incentive contracts within supply chain settings and the broader principal-agent framework. He investigates incentive conflicts among parties with asymmetric information, contributing to the understanding of supply chain contracting, the marketing-operations interface, e-commerce pricing, and production and inventory planning. He received his Ph.D. in Decision, Risk and Operations from Columbia Business School in 2007, his Ph.D. in Industrial Engineering and Engineering Management from Hong Kong University of Science and Technology in 2002, and his B.S. in Applied Mathematics from Tsinghua University in 1999. Professor Xiao's work emphasizes the analysis of incentive conflicts and contract design in complex operational environments, making significant contributions to the fields of supply chain management and operations research.

Research topics

• Computer Science
• Business
• Finance
• Marketing
• Internet privacy
• Economics
• Industrial organization
• Microeconomics
• Financial system

Selected publications

• Strategic Financing and Information Revelation Amid Market Competition

  Manufacturing & Service Operations Management · 2026-04-22

  article

  Problem definition: Interest rates on loans are often influenced by market prospects. Under asymmetric information, firms may attempt to signal strong prospects to lenders by over-borrowing. However, publicly revealing confidence in the market can also intensify competition. Motivated by these observations, we examine a firm’s financing and information disclosure strategy. Methodology/results: We develop a game-theoretical model where a firm with private information about the market prospect competes in quantity against a representative competitor. The firm has a limited amount of internal capital and must borrow from lenders to finance production. We show that when borrowing information is publicly accessible, the firm’s strategy depends on its capital needs and the level of competition. If capital needs are high and competition is low, the firm over-finances under strong market prospects to secure a lower interest rate. Conversely, if capital needs are low and competition is high, the firm under-finances under weak market prospects to reduce competitive pressure. Interestingly, in other scenarios, these opposing incentives neutralize each other, leading to a first-best outcome. We further explore private financing, where borrowing information remains undisclosed, forcing the competitor to rely on prior market information. We find that public financing generally dominates private financing under intense competition, but it can also be advantageous when competition is low and capital needs are high. Managerial implications: Our findings suggest that, under information asymmetry and competition, external borrowing can sometimes be beneficial by creating a counterbalancing force, and a slight increase in competition is not always detrimental when financing needs exist. History: This paper was selected as part of the 1RR initiative between the M&SOM Journal and the MSOM Society. This paper was part of the 2024 MSOM Service Operations SIG Conference. Supplemental Material: The online appendix is available at https://doi.org/10.1287/msom.2025.0243 .

  PublisherDOI

• Research on Tourism Development Strategies for Geoparks from the Perspective of Cultural-Tourism Integration: A Case Study of Yunyang Longgang

  International Journal of Global Economics and Management · 2025-06-27

  articleOpen access1st authorCorresponding

  With the vigorous development of the tourism industry, geoparks, as a distinctive category of tourist destinations, have gained increasing popularity among visitors owing to their unique natural landscapes and scientific value. Yunyang Longgang National Geopark, characterized by its spectacular karst tiankengs, extensive solution cave systems, and distinctive natural ecosystems, has emerged as a focal point for domestic and international tourists. Taking Yunyang Longgang Geopark as a case study, this research employs the perspective of cultural-tourism integration to analyze its current tourism status, identify critical challenges, and propose development strategies encompassing: infrastructure enhancement, increased community engagement, strengthened management and conservation of the park, and enrichment of its cultural connotations.

  PublisherOA PDFDOI

• Fulfillment by Amazon as a Strategic Lever: Anticompetitive or Welfare Enhancing?

  SSRN Electronic Journal · 2025-01-01

  preprintOpen accessSenior author
  PublisherDOI

• Multi-Dimensional Signaling with Supplier Credit Guarantee

  SSRN Electronic Journal · 2024-01-01 · 1 citations

  preprintOpen accessSenior author
  PublisherDOI

• Optimal Salesforce Compensation with General Demand and Operational Considerations

  Manufacturing & Service Operations Management · 2024-09-12 · 1 citations

  articleSenior author

  Problem definition: We investigate the optimal salesforce compensation scheme in the context of private information and unobservable actions, considering common operational factors encountered in practice, including inventory costs, contractible versus censored demand information, and controlled versus delegated ordering. Methodology/results: Based on an agency model with general demand and cost functions, we derive optimality conditions for implementable contracts that can achieve the second-best outcome in all scenarios. The contracts are in the forms of a menu with linear compensation for demand or sales, incorporating inventory costs. Moreover, the contracts feature adjustments in compensation corresponding to the ordering level if it is delegated. Managerial implications: Our study reveals that, under reasonably mild conditions, optimal salesforce contracts can still maintain relatively simple forms, even when confronted with common operational factors and generalized demand and cost functions. However, the contracts must be tailored to suit the operational settings. Intriguingly, neither the loss of demand information nor the delegation of inventory decisions would compromise system efficiency at optimum. Funding: H. Song is partially supported by the Key International Cooperation and Exchange Projects of the NSFC [Grant W2411062] and the Foundation for Innovative Research Groups of the NSFC [Grant 71821002]. Supplemental Material: The online appendix is available at https://doi.org/10.1287/msom.2022.0400 .

  PublisherDOI

• Platform Financing vs. Trade Credit for Lending to Third-Party Sellers

  Management Science · 2024-10-10 · 16 citations

  articleSenior author

  We study platform financing in comparison with trade credit for lending to third-party sellers, considering scenarios where default risk is driven by external factors (exogenous) or influenced by the parties’ decisions (endogenous). Our findings indicate that under exogenous default risk, although platform financing exposes the platform to the seller’s default risk, it can enhance the seller’s sales by providing low-rate finance and reducing the wholesale price because the supplier remains isolated from default risk. Platform financing emerges in equilibrium, benefiting all parties, particularly in businesses facing significant default risk, high product costs, operating in small markets, or having a high commission rate. In cases of endogenous default risk, platform financing can mitigate the seller’s opportunistic behavior, either preventing or reducing default risk, and the effects of product costs and market uncertainty may become nonmonotonic. In certain scenarios, platform financing arises in equilibrium when the product cost is intermediate or sufficiently high but not in between and when market uncertainty is moderate but not low or high. We also explore the impacts of the seller’s initial capital and credit limits, providing valuable managerial insights. This paper was accepted by Jeannette Song, operations management. Funding: The corresponding author, X. Wang, is supported by the National Natural Science Foundation of China [Grants 72071204 and 72331011]. Supplemental Material: The online appendix and data files are available at https://doi.org/10.1287/mnsc.2022.00201 .

  PublisherDOI

• Coopetition in Platform-Based Retailing: On the Platform’s Entry

  Management Science · 2024-08-28 · 21 citations

  articleSenior author

  We study the dynamic incentive interactions between a platform and a third-party seller over two stages, where the seller exerts product-value-enhancement effort in the first stage in anticipation of the platform’s potential entry in the second stage. Upon entry, the platform can exert effort to boost the value of the product sold by the platform, with positive spillovers to the value of the product sold by the platform. We show the existence of both the protective and the receptive regimes, characterizing the necessary and sufficient conditions for each regime. These conditions are of thresholds type with respect to the parameters including the degree of spillover, the referral rate, and the competition intensity. In the protective (receptive) regime, the seller is worse (better) off with the platform’s entry than without, thereby distorting effort downward (upward) from the first best to deter (induce) the platform’s entry to the products of intermediate value. Notably, if the spillover effect is negative, only the protective regime will arise. We also provide the necessary and sufficient conditions under which the platform’s nonentry commitment strictly improves the platform’s profits by restoring the seller’s effort to the first best, achieving the win-win outcome for both the platform and the seller. This paper was accepted by Jeannette Song, operations management. Funding: H. Song is partially supported by the Key International Cooperation and Exchange Projects of the NSFC [Grant W2411062] and the Foundation for Innovative Research Groups of the NSFC [Grant 71821002]. Supplemental Material: The online appendix is available at https://doi.org/10.1287/mnsc.2023.00260 .

  PublisherDOI

• How Sustainable are Sustainability-Linked Loans?

  SSRN Electronic Journal · 2024-01-01

  preprintOpen accessSenior author
  PublisherDOI

• No-Regret Learning in Multi-Retailer Inventory Control

  SSRN Electronic Journal · 2023-01-01 · 1 citations

  articleOpen access
  PublisherDOI

• Lending to Third-party Sellers with Platform Loan

  SSRN Electronic Journal · 2022 · 8 citations

  Senior authorCorresponding
  • Computer Science
  • Business
  • Financial system
  PublisherDOI

Frequent coauthors

• Guoming Lai

  The University of Texas at Austin

  17 shared

• Terry A. Taylor

  6 shared

• Chung‐Lun Li

  City University of Hong Kong

  5 shared

• Stephen Shum

  5 shared

• Haotian Song

  Zhejiang University

  4 shared

• Ying‐Ju Chen

  University of Hong Kong

  4 shared

• Vernon Ning Hsu

  4 shared

• Yi Xu

  3 shared