November 10, 2008 § Leave a comment
The WSJ ran a short but interesting piece this weekend which focused on how Obama is perceived among Chicago School economists given his background with the University of Chicago. The piece focuses on the thoughts of Richard Thaler, one of the leaders in the school of behavioral economics which has largely examined the efficient markets theorized by the old Chicago School crowd and identified scenarios in which actors systemically fail to make efficient decisions. This line of study is an interesting glimpse into human behavior and is very important in the context of efficient market arguments which all assume decision makers behave in efficient ways (e.g. a person will take $2 in exchange for $1). « Read the rest of this entry »
June 11, 2007 § Leave a comment
After four years and ~5o exams, this past weekend I received my degrees from the University of Chicago Law School and the University of Chicago Graduate School of Business. It feels great to finally have the diplomas in hand, and I’m extremely excited to now be able to focus 100% of my time in directions that I choose. I highly recommend both schools to anyone seeking a rigorous graduate school experience. The value that these institutions place on ideas, debate and intellectual curiosity is truly unmatched.
May 8, 2007 § 1 Comment
I had the opportunity to moderate a panel discussion this afternoon, hosted by my school’s JD/MBA association, entitled “CEO Hiring, Firing and Compensation in a Post-SOX Private Equity Boom.” The panelists were Professor Steven Kaplan (GSB), who testified to Congress about CEO compensation and HR 1257 in March of this year, Professor Douglas Baird (Law), the global authority in the academic world on bankruptcy and reorgs who has written on the importance of CEO hiring and firing vs. compensation structure, and Professor Todd Henderson (Law), who is delivering the annual Chicago’s Best Ideas lecture tomorrow and will argue that CEOs are actually underpaid in today’s marketplace.
The discussion was extremely interesting and focused on why CEO has reached the levels it has today, whether it is deserved, and whether it is societally beneficial for it to continue to increase. In short, Kaplan thinks in large part that CEO pay is not overinflated and bases much of his argumenton the fact that the market for top managerial talent has gotten more expensive thanks to hedge, private equity, and VC fund payouts. Henderson’s beliefs that CEOs of public companies are underpaid are in part based on the fact that SOX has increased CEO liability and scrutiny, and that their payscale has not adjusted accordingly. Baird generally believes that too much time is spent on compensation package structure and not enough on picking the right person to do the job.
We were limited to an hour and did 15 minutes of Q&A so we were really only to brush the surface of the issues. I was hoping to be able to hear their thoughts on the “upward spiral” theories (aka: the Lake Wobegon effect) of CEO compensation which posit that since all major CEO hires involve compensation consultants, and every company hiring wants their CEOs to be compensated in the top 1/4 or 1/3 among their peers, the comp packages are blindly increasing as every new hire raises the bar…I guess we’ll have to get to that next time.
April 3, 2007 § Leave a comment
Interesting post on Sam Zell‘s legal background and the recent Tribune deal announcement on the WSJ law blog. They quote some other WSJ article on Zell’s background that struck several chords with me personally and professionally:
When he was a student at the University of Michigan School of Law, Mr. Zell spent part of his time managing apartment buildings, so he had contacts in real estate. But he had every intention of carving out a career in law. After graduation, he joined [Yates Holleb and Michelson] in Chicago. The starting salary was $116 a week, but an ambitious young lawyer could supplement that by bringing new business to the firm.
“I spent my first week drafting a contract,” Mr. Zell recalls. “It was deadly.” That weekend, he got in touch with some of his real-estate contacts, and “the following Monday I brought in my first deal, an apartment project in Toledo, Ohio. The partners liked it so much they all invested.” Thanks to deals like that one, Mr. Zell earned $100,000 his first year out of law school — $93,000 in commissions and $7,000 in pay — more than any of the firm’s senior partners. Never again would he formally practice law.
March 27, 2007 § Leave a comment
Douglas Lichtman, IP legal guru and rising professorial star at the University of Chicago Law School, has joined the YouTube fray on the side of Viacom. His recent piece in the LA Times indicates that he is working for Viacom, although I am guessing he isn’t doing it pro bono. Lichtman is a high profile contract consultant for the Gerson Lehrman Group, and I’m sure he bills out at a pretty penny. He is also my patent law professor, and the first class meeting is tomorrow morning. Should be interesting…
March 3, 2007 § Leave a comment
Last week, the Washington Post ran an interesting article by Cass Sunstein on Wikipedia. Sunstein is a tenured professor at my law school and is often referred to as the most cited living legal scholar, although I think Posner might have him beat. The article leads with a great stat:
In the past year, Wikipedia, the online encyclopedia that “anyone can edit,” has been cited four times as often as the Encyclopedia Britannica in judicial opinions, and the number is rapidly growing.
The article pulls much of its content from Sunstein’s most recent book Infotopia, which analyzes wikis, future markets, and crowd wisdom in a variety of arenas. I’m reading it and it’s great so far, although I think the article in The Post probably pulls the most salient points. I will put up a full review of the book when I have completed it. The most interesting thing I have gotten to so far is his statistical analysis of prediction markets and when they work and when they don’t. In short, they work nearly perfectly when the average respondent is more likely than not to be correct. As the number of respondents increases, the more accurate the market prediction will be, so long as each participant has on average more than a 50% chance of being correct. This is why prediction markets work for things like internal corporate polls about product releases but fail for stuff like Supreme Court nominations.
The beauty of the small size and intense focus of my law school is that Sunstein was one of my professors during my first quarter of my first year and I was lucky enough to have Epstein the following quarter as well. Both are brilliant and wonderfully quirky. Sunstein would always start each class with a 10 minute recap of what was discussed in the previous class and everyone would pound on their laptops to capture every word. Then he would launch into the new discussion for the day and the typing would quickly taper off, replaced by intense focus trying to follow him from point to point. He would cold call about five people every day and I bet 20% of the people called on in that class had any idea what was going on when they answered him. Definitely some of the hardest thinking I have ever done.