Research Interests: compensation, corporate strategy, eastern thought, economics of sports, experimental economics, game theory, microfinancing
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
Keith W Weigelt, W. Bruce Allen, Neil A Doherty, Edwin Mansfield, Managerial Economics: Theory, Applications and Cases (2005)
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.
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.
The Senior Capstone Project is required for all BAS degree students, in lieu of the senior design course. The Capstone Project provides an opportunity for the student to apply the theoretical ideas and tools learned from other courses. The project is usually applied, rather than theoretical, exercise, and should focus on a real world problem related to the career goals of the student. The one-semester project may be completed in either the fall or sprong term of the senior year, and must be done under the supervision of a sponsoring faculty member. To register for this course, the student must submit a detailed proposal, signed by the supervising professor, and the student's faculty advisor, to the Office of Academic Programs two weeks prior to the start of the term.
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.
The half-credit (0.5 CU) Managing Disruptive Change (MDC) lecture series exposes students to particular industries, ideas, or issues through collaborative partnerships between Wharton faculty and high-profile guest lecturers. It is an initiative of the Wharton Dean's Undergraduate Advisory Board (WAB) to provide students with long-term engagement to high-profile Wharton faculty and guest lecturers. Each year, the program will work to bring together academic and industry professionals to teach a current, thought-provoking topic in business. In the Fall of 2019, MDC presents "Special Topics ISP: Cryptocurrencies. This investigative course will introduce students to the history, business, and theory of cryptocurrencies via a weekly rotating professor/practitioner structure. The goals of this Fall 2019 program are to provide students with a multi-faceted understanding of cryptocurrencies through the lens of numerous experts both in academia and in the business world, to help students contextualize cryptocurrency into a greater academic and practical framework, and to enable students to learn from the teachings of industry experts and take those lessons with them into their academic and professional lives.
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 in a variety of settings. The course is designed to be relevant to the broad spectrum 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 and OIDD 291.
Do you want to make a real difference in the lives of a student? Do you want to set kids on a path to becoming financially literate? Do you want to learn leadership skills in the classroom? Here at the Financial Literacy Community Project (FLCP) we are able to create an experience that achieves all three. We partner with various public schools around the West Philadelphia area and teach concepts integral to financial literacy. We teach a wide range of grades from middle school to high school, and work with students to help them learn how to be financially responsible. In addition to teaching in neighboring high schools, we also have group class meetings run by Professor Keith Weigelt on Mondays from 7:00 PM-8:30 PM. We learn about the disparity of wealth and how to best address it while also learning teaching techniques, classroom strategies, and overall basic financial literacy. A basic understanding of personal financial literacy is required.
FAP is an experiential-based course where learning is done outside of the classroom. It is unique in its lack of a classroom setting all meetings take place in a professor's office in small teams of 4 to 6 students. Teams are faced withreal-time issues of outside organizations and work with faculty and host managers to construct innovative solutions. Solutions are integrative and cross-functional in nature. We encourage creative thinking giving students wide access towhat we call "area of expertise" faculty. Depending on the project scope we help students arrange meetings with professors who are experts in their field. Host organizations range from large multinational firms to start-ups. A significant percentage of the projects are with non-profits and organizations focused on social causes. Format: Teams (4-6 members) meet with faculty on a weekly basis (30-45 minutes). There are also 3-5 meetings with host managers. In addition to meeting with aFaculty Head, students are given access to "area of expertise" faculty. These faculty members are chosen based on their specific expertise. The final deliverable consists of an oral presentation and a written document. Requirements: Weekly team meetings with faculty project head and a final PowerPoint report and presentation.
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.
Business success is increasingly driven by a firm's ability to create and capture value through innovation. Thus, the processes used by firms to develop innovations, the choices they make regarding how to commercialize their innovations, the changes they make to their business models to adapt to the dynamic environment, and the strategies they use to position and build a dominate competitive position are important issues facing firms. In MGMT. 892, you will learn to address these issues through an action learning approach. MGMT. 892 is a 1.0-credit course conducted in the spirit of an independent study. By working on consulting projects for leading global companies, you will develop and then apply your knowledge about innovation management and help these firms better understand the challenges and opportunities posed by emerging technologies and markets.
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.
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