The Becker Brown Bag Series was created to provide an informal setting in which prominent economists can present cutting-edge research and engage MBA students in discussion. The talks highlight the practical use of economics for answering real-world questions pertinent to businesses and policy makers.
While the Becker Brown Bag Series is directed towards current MBA students, alumni, faculty, and staff are welcome to attend. Brown Bags occur one to two times per quarter, with most events being held in Room 104 at Chicago Booth’s Charles M. Harper Center. Lunch is provided.
Program
Monday, October 24
Economists have long been interested in when and how incentive pay can be used to improve employee performance. The traditional rationale for such schemes is to promote effort when direct monitoring of employee activities is difficult or costly.
In the first Becker Brown Bag Series talk for 2016–17, Becker Friedman Institute Visiting Scholar Erik Madsen discussed how incentive pay can be used for a different purpose—to encourage employees to share knowledge which is important for managerial decision-making. When employee and management priorities clash, information sharing may break down. Madsen explored solutions in a talk rooted in Ronald Coase’s seminal work on the nature of the firm and related to contract theory research that won the 2016 Nobel Prize.
He illustrated the issue with a hypothetical case study involving the decision of when to wrap up a long-term project. Deadlines, completion bonuses, and progressively tougher progress reviews all play crucial roles in aiding accurate decision-making.
Monday, November 21
How does forcing banks to hold liquid assets influence the chance of a run? Because a bank’s exact need for liquidity is difficult to know in real time, depositors have incomplete information about its ability to survive a run. The incomplete information means that a bank is not automatically incentivized to hold enough liquid assets to survive runs. Regulations similar to those implemented recently can change the bank’s incentives so that runs are less likely.
At this talk, Douglas W. Diamond of Chicago Booth discussed how these regulations can be improved.
Diamond,an expert in the study of financial intermediaries, financial crises, and liquidity, is the Merton H. Miller Distinguished Service Professor of Finance. He is a visiting scholar at the Federal Reserve Bank of Richmond and was among several distinguished scholars of finance contributing to “The Squam Lake Report : Fixing the Financial System” in 2010.
Thursday, February 16
The literature on the evolution of influenza—and current economic estimates of the value of vaccination—assume that getting a flu shot does not affect drift and variation in the illness. But that is not theoretically sound; Vaccination as much as natural immunity acquired through infection should affect flu evolution.
In this talk, Anup Malani, the Lee and Brena Freeman Professor at the University of Chicago Law School and a professor at the Pritzker School of Medicine, presented work that simulates the impact of vaccination on the evolution of flu, and calculates the externalities arising from vaccination.
Monday, April 17
Financial markets are an environment of immense complexity and uncertainty. People make investment and business decisions based on their best guesses of future economic conditions, which compounds uncertainty.
Often the economic models economists use to predict the future are not designed to cope with those unknown factors, according to Lars Peter Hansen, David Rockefeller Distinguished Service Professor in Economics and Statistics. Hansen opened his Becker Brown Bag lunchtime lecture on April 17 by placing emphasis on the need to think about the concept of uncertainty in broader terms than is typical in economic analyses.
Drawing from macroeconomics, asset pricing, and statistics, Hansen highlighted how the interplay between these fields helps illuminate a broader understanding of uncertainty. Using those insights, he showed how to assess economic uncertainty from the inside and outside of the economic models.
Tuesday, May 16
The 2016 election prompted widespread concern about the role of digital news and social media in driving political polarization. Stanford University Professor Matthew Gentzkow present recent research on the extent of these trends, and discussed their implications for the future of American democracy.