Economist John Roberts, a professor at Stanford University, has won this year's edition of the 'Economics for Management Lecture Series IESE-Fundación BBVA Prize'. Donald John Roberts, now resident in the United States, was born in Winnipeg (Canada) in 1945 and received his doctorate in economics in 1972 from the University of Minnesota. In 1980, he joined the faculty at Stanford University, where he currently holds the John H. Scully Professorship in Economics, Strategic Management and International Business in the Graduate School of Business (GSB). He is also faculty director of the Global Management Program and director of the Center for Global Business and the Economy at this same center.
The jury deciding the award cited Roberts' role as a bridge between the worlds of economic theory and business management, alongside his public policy experience as an advisor to the United States Government between 1979 and 1982. He has also acted as consultant for major corporations like British Petroleum, Shell, Merck and Deutsche Telekom.
In 2004, Roberts published 'The Modern Firm' exploring the links between organizational design features, competitive strategy and the business environment. This publication, selected by The Economist as best business book of the year, draws on examples ranging from the fur trading companies of the eighteenth century to modern-day names like Dupont, General Motors, BP or Nokia, focusing on how they have coped with the increase in global competition and changes in technology. Roberts is also author of more than seventy scholarly articles as well as innovative practical guides like 'Economics, Organization and Management', applying incentive and contract theories to the problems of management.
Professor Roberts has pioneered the application of economic theory and games theory to problems of economics and management, to the study of industrial competition (especially in the presence of information asymmetry among market agents) and to the economics of organizations. In recent years his research has focused on organizational design, governance and management and how to achieve the best fit between strategy and structure, with particular reference to multinational corporations.
A fellow of the American Academy of Arts and Sciences, he has served on the editorial boards of various influential journals from the American Economic Review to the Journal of Economics Management and Strategy by way of Econometrica, and has acted as advisor to leading companies and the United States Government.
The presentation of the 'Economics for Management Lecture Series IESE-Fundación BBVA Prize' will take place on Wednesday October 21 at 19.30 in the Madrid offices of the BBVA Foundation. After receiving his award, Professor Roberts will deliver a lecture titled 'In Praise of Weak Incentives', in which he will discuss the recent wave of attacks on the incentive systems employed by U.S. and British investment banks. These critiques are not just that the bankers got too much pay, but that their pay systems encouraged too much risk-taking. In fact, economic theory identifies a number of circumstances where the link between measured performance and rewards should ideally be very weak.
This talk will highlight several of these circumstances and analyze the underlying logic, which squares perfectly well with the conditions of the banking industry in recent years. Thus the theory indicates that the strong incentives put in place were not only inappropriate and badly designed but also played a crucial role in generating the global financial crisis. Subsequently, the lecture will be published by Cambridge University Press under a dedicated publishing line: the Economics for Management Lecture Series.
IESE- FUNDACIÓN BBVA PRIZE
Last year's 'Economics for Management Lecture Series IESE-Fundación BBVA Prize' was granted to Pankaj Ghemawat, a professor in the Strategic Management Department at IESE Business School, in recognition of his research work in economics and salient contributions in the international business sphere. The year before, the inaugural prize went to Carl Shapiro, professor in the Haas Business School of the University of California at Berkeley.