Keith W Weigelt

Keith W Weigelt
  • Marks-Darivoff Family Professor
  • Professor of Management

Contact Information

  • office Address:

    2112 SH-DH
    3620 Locust Walk
    Philadelphia, PA 19104

Research Interests: compensation, corporate strategy, eastern thought, economics of sports, experimental economics, game theory, microfinancing

Links: CV


1986 – Ph.D. in Business Policy, Kellogg Graduate School, Northwestern University

1975 – M.B.A. (Marketing), Michigan State University

1973 – B.A. (Institutional Management), Michigan State University




FAP: Field Application Project

Building Bridges to Wealth

Continue Reading


  • Keith W Weigelt, W. Bruce Allen, Neil A Doherty, Edwin Mansfield, Managerial Economics: Theory, Applications and Cases (2005)

  • Keith W Weigelt and T. Ho (2005), Trust Building among Strangers, Management Science.

    Abstract: The trust-building process is basic to social science. We investigate it in a laboratory setting using a novel multistage trust game where social gains are achieved if players trust each other in each stage. In each stage, also, players have an opportunity to appropriate these gains or be trustworthy by sharing them. Players are strangers because they do not know the identity of others and they will not play them again. Thus, there is no prospect of future interaction to induce trusting behavior, and we study the trust-building process where there is little scope for social relations and networks. Standard game theory, which assumes all players are opportunistic and untrustworthy and thus should have zero trust for others, is used to construct a null hypothesis. We test whether people are trusting or trustworthy and examine how inferring the intentions of those who trust affects trustworthiness. We also investigate the effect of stake on trust, and study the evolution of trust. Results show subjects exhibit some degree of trusting behavior, although a majority of them are not trustworthy and claim the entire social gain. Players are more reluctant to trust in later stages than in earlier ones and are more trustworthy if they are certain of the trustee's intention. Surprisingly, subjects are more trusting and trustworthy when the stake size increases. Finally, we find the subpopulation that invests in initiating the trust-building process modifies its trusting behavior based on the relative fitness of trust.

  • Keith W Weigelt (2000), Production Location Choice in a Differentiated Product Market, Strategic Management Journal.

    Abstract: We test theories of product differentiation and firm capabilities using data from the U.S. automobile industry. We find managers introduce new models close to their existing ones but far from rival models. We also find entrants and foreign manufacturers locate models closer to rival models. These results are consistent with both economic models of product differentiation and theories of firm capabilities

  • Keith W Weigelt, A. Orrison, A. Schotter (Forthcoming), On the Design of Optimal Organizations Using Tournaments: An Experimental Examination.

  • Keith W Weigelt and T. Ho (1996), Task Complexity, Equilibrium Selection, and Learning, Management Science.

    Abstract: We consider several coordination games with multiple equilibria each of which is a different division of a fixed pie. Laboratory experiments are conducted to address whether "task complexity" affects the selection of equilibrium by subjects. Three measures of task complexity-cardinality of choice space, level of iterative knowledge of rationality, and level of iterative knowledge of strategy-are manipulated and tested. Results suggest the three measures can predict choice behavior. Since strategically equivalent games can have different task complexity measures, our results imply that subjects are sensitive to game form presentation. We also fit data using three adaptive learning models: 1) Cournot, 2) Fictitious Play, and 3) Payoff Reinforcement, in increasing order of required cognitive effort. The Fictitious Play model, which tracks only cumulative frequencies of opponents' past behaviors fits the data best.

  • Keith W Weigelt, A. Schotter, C. Wilson (1994), A Laboratory Investigation of Multi-Person Rationality and Presentation Effects, Games and Economic Behavior. 10.1006/game.1994.1026

    Abstract: This paper reports the results of laboratory experiments in which subjects were presented with different two-person decision problems in both their extensive and normal forms. All games generated the same equilibrium outcomes. Our results indicate that the presentation of the decision problem significantly affects the strategy chosen. Surprisingly, these presentation effects were most prominent in the simplest games where differences in presentation would seem most transparent. It appears that subjects are much more likely to use (and fear) incredible threats when the problem is presented as a one-stage rather than as a multistage game.

  • Richard A. Lambert, David Larcker, Keith W Weigelt (1993), The Structure of Organizational Incentives, Administrative Science Quarterly, (September), pp. 438-461.

    Abstract: To improve understanding and design of organizational incentives, we used confidential compensation data obtained for four distinct organizational levels (ranging from plant manager to corporate chief executive officer) to evaluate the ability of tournament, managerial power, and agency theories to explain these observed compensation data. Our results suggest that organizational incentives are most appropriately characterized by a combination of these models, rather than being completely described by a single theoretical description.

  • Richard A. Lambert, David Larcker, Keith W Weigelt (1991), How Sensitive is Compensation to Organizational Size?, Strategic Management Journal, (July), pp. 395-402.

    Abstract: Prior empirical research has documented a large cross-sectional correlation between the level of executive pay and firm size. In contrast, this paper examines the association between percentage changes in executive compensation and percentage changes in organizational size. We analyze compensation and size data for executives at several levels of the corporate hierarchy for a sample of 303 firms. Our results indicate that the correlation between compensation and size is much smaller, although still statistically significant, in changes than in levels. This suggests that changes in an executive's compensation are not primarily driven by changes in organizational size.


Past Courses


    This course examines the art and science of negotiation, with additional emphasis on conflict resolution. Students will engage in a number of simulated negotiations ranging from simple one-issue transactions to multi-party joint ventures. Through these exercises and associated readings, students explore the basic theoretical models of bargaining and have an opportunity to test and improve their negotiation skills.


    This course encourages students to analyze the problems of managing the total enterprise in the domestic and international setting. The focus is on the competitive strategy of the firm, examining issues central to its long- and short-term competitive position. Students act in the roles of key decision-makers or their advisors and solve problems related to the development or maintenance of the competitive advantage of the firm in a given market. The first module of the course develops an understanding of key strategic frameworks using theoretical readings and case-based discussions. Students will learn concepts and tools for analyzing the competitive environment, strategic position and firm-specific capabilities in order to understand the sources of a firm's competitive advantage. In addition, students will address corporate strategy issues such as the economic logic and administrative challenges associated with diversification choices about horizontal and vertical integration. The second module will be conducted as a multi-session, computer-based simulation in which students will have the opportunity to apply the concepts and tools from module 1 to make strategic decisions. The goal of the course is for students to develop an analytical tool kit for understanding strategic issues and to enrich their appreciation for the thought processes essential to incisive strategic analysis. This course offers students the opportunity to develop a general management perspective by combining their knowledge of specific functional areas with an appreciation for the requirements posed by the need to integrate all functions into a coherent whole. Students will develop skills in structuring and solving complex business problems.


    Open to all sophomores, juniors, and seniors. This course develops your knowledge and skills for designing, leading, and consulting with teams in organizations. The goals are to provide both the conceptual understanding and the behavioral skills required to improve team effectiveness. This course makes use of analytic and reflective writing, peer feedback and coaching, simulations, and an intensive field project with a real team in the Philadelphia area. There are four kinds of teams that are the focus of your study: teams of which you've been a member in the past; your 240 Team, with three or four other classmates; a team outside of 240 that your 240 Team will observe, analyze, and report on -- your Host Team; and a team you expect to be on in the future. The primary case material for applying course concepts (learned from readings and lectures) will be these teams you know from direct observation and experience. Expect to leave this course with new knowledge of how to diagnose and intervene -- as leader, member, or consultant -- to improve the performance sustainability, and impact on the members of any team. Prerequisite: Sophomore standing or above.


    This course includes not only conflict resolution but techniques which help manage and even encourage the valuable aspects of conflict. The central issues of this course deal with understanding the behavior of individuals, groups, and organizations in conflict management situations. The purpose of this course is to understand the theory and processes of negotiations as it is practiced ina variety of settings. The course is designed to be relevant to the broad specturm of problems that are faced by the manager and professional including management of multinationals, ethical issues, and alternative dispute resolutions. Cross listed w/ LGST 206 & OPIM 291.

  • MGMT353 - WHARTON FIELD CHALLENGE Students Info.htm


    This is a course in analyzing competitive interactions. The course emphasizes a vision of strategy in which each competitor simultaneously chooses its strategy, taking into account the strategies of its opponents. Crucial to this vision is the anticipation of the moves of your opponent and, in particular, the expectation that your opponent is (almost) as smart as you are. Equal attention will be given to the development of techniques for analyzing competitive interactions and to the application of those techniques. Game theory and the economics of industrial organization provide the basis for the theoretical constructs developed in the course. Topics that will be explored include: market failures and profitability, competitive bidding, signaling, entry deterrence, agenda setting, regulations, and price wars.


    This course examines some of the central questions in management with economic approaches as a starting point, but with an eye to links to behavioral perspectives on these same questions. It is not a substitute for a traditional microeconomics course. Economics concerns itself with goal directed behavior of individuals interacting in a competitive context. We adopt that general orientation but recognize that goal directed action need not take the form of maximizing behavior and that competitive processes do not typically equilibrate instantaneously. The substantive focus is on the firm as a productive entity. Among the sorts of questions we explore are the following: What underlies a firms capabilities? How does individual knowledge aggregate to form collective capabilities? What do these perspectives on firms say about the scope of a firms activities, both horizontally (diversification) and vertically (buy-supply relationships)? We also explore what our understanding of firms says about market dynamics and industry evolution, particularly in the context of technological change. A central property of firms, as with any organization, is the interdependent nature of activity within them. Thus, understanding firms as "systems" is quite important Among the issues we explore in this regard are the following. Organizational "systems" have internal structure, in particular elements of hierarchy and modularity. Even putting aside the question of individual goals and objectives and how they may aggregate, the question of organizational goal is non-trivial. To say that a firms objective is to maximize profits is not terribly opera tional. How does such an overarching objective get decomposed to link to the actual operating activities of individual subunits, including individuals themselves. This issue of goals has links to some interesting recent work that links the valuation process of financial markets to firm behavior. Financial markets are not only a reflection of firm value, but may guide firms initiatives in systematic ways.


    This is an introductory doctoral seminar on research methods in management. We examine basic issues involved in conducting empirical research for publication in scholarly management journals. We start by discussing the framing of research questions, theory development, the initial choices involved in research design, and basic concerns in empirical testing. We then consider these issues in the context of different modes of empirical research (including experimental, survey, qualitative, archival, and simulation). We discuss readings that address the underlying fundamentals of these modes as well studies that illustrate how management scholars have used them in their work, separately and in combination.


    Negotiation is the art and the science of creating good agreements between two or more parties. This course develops managerial negotiation skills by mixing lectures and practice, using cases and exercises in which students negotiate with each other. The cases cover a wide range of problems and settings: one-shot deals between individuals, repeated negotiations, negotiations over several issues, and negotiations among several parties (both within and between organizations). Class participation and case studies account for half the course grade. Students will also write about a negotiation experience outside of class.

Awards and Honors

  • Undergraduate Division Excellence in Teaching Award, 2005
  • Miller-Sherrerd Teaching Award, 2004
  • Wharton Graduate Association’s “Tough, but I will thank you in 5 years” Teaching Award, 2004
  • Core Class Teaching Award – Wharton, 1999
  • Core Class Teaching Award – Wharton, 1996

In the News

Knowledge @ Wharton


Latest Research

Keith W Weigelt, W. Bruce Allen, Neil A Doherty, Edwin Mansfield, Managerial Economics: Theory, Applications and Cases (2005)
All Research

In the News

John Nash’s Legacy Lives on in Business Strategy

With his work in game theory, late Nobel laureate John Nash transformed the field of strategy formulation in organizations. The millennial generation will help unlock the full value of his ideas, say Wharton experts.

Knowledge @ Wharton - 2015/05/27
All News

Awards and Honors

Undergraduate Division Excellence in Teaching Award 2005
All Awards