|
|
 |
 |
May 2004 Kreps Authors Microeconomics for Managers
To many former students of microeconomics, the subject is mostly about "supply equals demand," the model of a large and impersonal market in which many anonymous buyers and sellers interact, trading some commodity item. While substantial portions of the economic world approximate that ideal, even more of it consists of cases "like Microsoft dealing with Intel or like Boeing dealing with Airbus and at the same time dealing with the people who make airplane engines," says David Kreps, the author of the new textbook Microeconomics for Managers, published by W. W. Norton & Co. Written for MBA students, this text covers the traditional topics but is equally about "economics where people have identities and where identities and relationships matter," says Kreps, the Theodore J. Kreps Professor of Economics and senior associate dean of the Business School. Microeconomics expanded beyond "supply equals demand" about 30 years ago in response to two intellectual developments, he says. "In the early 1970s, [GSB professor, and later dean] Mike Spence and other people started studying information economics. Simultaneously, [GSB professor] Bob Wilson and others began applying noncooperative game theory to economic issues," recalls Kreps. "It was a match made in heaven: Game theory gave us the right language to discuss issues like cooperation, reputation, proprietary information—about anything that had to do with identity." Stanford Business School alumni from 1980 to 1990 probably remember topics such as incentives and signaling entering into the old B261 Decision Trees course. About 1990, these topics were moved to the introductory micro course and then reappeared in courses in strategic and human resource management and many others. Today, these ideas are woven into much of the MBA curriculum, and the new textbook gives them the prominence they have earned. Kreps credits his Stanford MBA students with pushing him to apply recent Nobel Prize-winning theories to the practical world of real businesses in both class discussions and the book. In the required economics course for first-year students, he writes in the book's preface, the typical student is highly skilled analytically but "the group ethic is that ideas that do not pay back in the first five months on the job are suspect, and those that mightn't pay back in the first five years are a complete waste of time." MBA students learn by analogy and example, he says, rather than by absorbing abstract theory. "Ask MBAs what they know about implicit collusion with noisy observables, and the response is likely to be, 'Huh?' But when asked what they learned about any given industry from the GE-Westinghouse case, they will give a sophisticated and nuanced answer." The book, therefore, tries to motivate and illustrate the frameworks and theories it presents with real-world examples: from General Motors trying to settle a class-action lawsuit with coupons to Porsche trying to reorganize how its cars are retailed in the United States; to an explanation for how and why Toyota increases the power of its suppliers. Kreps may be the perfect economist to write such a book. A very well-regarded teacher, he won the School's Distinguished Teaching Award in 1991, the first year he taught microeconomics and imported these ideas into the core course. He is among the economists who, in the early 1980s, helped marry game theory to information economics, but at the same time he has been critical of how these ideas have sometimes been used. "These theories can be very useful," he says, "but managers need to exercise honest skepticism, bringing other inputs to bear. Managers have to see where the question really lies, whether it is mostly a matter of economics or if noneconomic forces play an important role, and they have to integrate what economics tells them with what other frameworks say. That's where judgment comes in. People pay Stanford MBAs good money not to just be rote appliers of tools but to have the ability to sort through and judge the usefulness of various types of theories." David Brady, the Bowen H. and Janice Arthur McCoy Professor of Political Science and Leadership Values, has become deputy director of Stanford's Hoover Institution. A faculty member since 1987, Brady joined the Hoover Institution as a senior fellow in 1989 and was appointed associate director in 2002. He is also a professor in the Department of Political Science. Brady, 63, has served in numerous administrative roles on campus, including four years as associate dean for academic affairs in the Business School, where he directed the Executive Education program. Brady also has codirected the Social Science History Institute and served as associate vice provost for communication in the Provost's Office. Currently, he directs the Stanford Public Policy Program. He is an expert on the U.S. Congress and congressional decision-making, and his current research focuses on the political history of Congress, the history of U.S. election results, and public policy processes in general. Brady has written several books and received the Richard F. Fenno Award of the American Political Science Association for the best book on legislative studies published in 1988-89. In 1995 and 2000, he received the Congressional Quarterly Prize for the best paper on a legislative topic. In 1991, he received the Phi Beta Kappa Award for distinguished teaching at Stanford, and in 1992 he won the Dinkelspiel Award for outstanding service to undergraduate education. A fellow at the Center for Advanced Study in the Behavioral Sciences during 1985-86 and in 2001, Brady also is a fellow of the American Academy of Arts and Sciences. Toward a 21st Century Health System is a collection of analyses that explore a key element of the health care delivery system—physician group practices. Edited by Business School professor emeritus Alain Enthoven and Laura Tollen, essays are written by a blue ribbon panel of health policy scholars and leaders including Stephen Shortell, Hal Luft, Donald Berwick, James Robinson, and Helen Darling. The book is published by Jossey-Bass (2004). Topics include organized delivery systems; quality of care in prepaid group practice vs. other types of managed care; the role of physician leadership and culture in group practice; prepaid group practice and the formation of national health policy; pharmacy benefits management; technology assessment; health services research; and employer purchasing of benefits. Enthoven is the Marriner S. Eccles Professor of Public and Private Management, Emeritus, and a senior fellow of the Center for Health Policy at Stanford. He was an architect of the managed competition model of health reform. Tollen is senior policy consultant for the Kaiser Permanente Institute for Health Policy and works on issues related to insurance market structure and function. |
|
Jack McDonald, the IBJ Professor of Finance, is known internationally for his work on investment in the context of global equity markets, but he is known at the Business School also for having taught the longest running course—Investment—for 36 years. One of his former students is Dean Robert Joss. Knowing McDonald's long history and loyal following among alums, a student writer for The Reporter newspaper thought it would be interesting to test the professor's memory and favoritism by asking him to reveal which year of his teaching was most memorable. Never at a loss for words, McDonald turned the question into an opportunity to give his investment philosophy: "There are always up markets and down markets. The most important year is always the current year—it is important to be 'in the moment.'" The lure of a quality education at a prestigious American or European university holds the same attraction for students from the developing world as the bright lights of the city did for an earlier generation of farm boys and girls—and is just as hard to curb, Robert L. Joss, dean of the Stanford Graduate School of Business, said during a session at the World Economic Forum held in Switzerland in January. Rather than lose the talents of their best and brightest, Joss said, countries can attract graduates who matriculate overseas back to their homelands if job opportunities exist. This can be true even in countries suffering from severe economic mismanagement, if companies doing business there are offering attractive packages. Joss and Dean Emeritus Michael Spence were among the business, education, and political leaders from 94 countries who took part in the annual meeting in Davos, Switzerland. Joss made the comments during a panel discussion titled "Are Universities Responsible for the Brain Drain?" Also on the panel was Howard Davies, Sloan, '80, director of the London School of Economics. Joss also participated in a panel discussing "Investing in Innovation." Spence was part of a panel discussing what many see as a turning point in employment patterns: the transfer of jobs offshore not simply to reduce costs but also to gain a foothold in markets of other countries. He also moderated a discussion of overhauling supply chains to reduce costs. In addition, Joss hosted an alumni reception for those involved in the five-day conference. Related Links
|
|
|
 |
|
|
|
Faculty
