Author: Haas News

Five distinguished scholars join the Berkeley-Haas faculty this fall as assistant professors.

Collectively, these promising academics have published nearly three dozen research papers and are the recipients of numerous honors and awards.

Associate Dean for Academic Affairs Ganesh Iyer led the recruitment efforts to staff a wide range of academic groups while recognizing the need for solid classroom experience. "I congratulate Ganesh for his diligence and dedication to continue our tradition of research and teaching excellence," says Dean Rich Lyons.

Lucas Davis joins the Economic Analysis and Public Policy Group. He held an assistant professor post at the University of Michigan and spent the past year as a visiting assistant professor at MIT’s economics department. Davis received his PhD from the University of Wisconsin, where he wrote his thesis on applied microeconomics. His current work focuses on energy and environmental economics, and he will work with EAP’s Severin Borenstein and Catherine Wolfram on energy economics. "I am thrilled at the opportunity to work more closely with them and the entire Haas faculty," says Davis. "The depth and quality of the expertise in applied microeconomics and energy economics here is unsurpassed anywhere."

William Fuchs is the newest member of the Haas Finance Group. He served as a business analyst at Hermes Management Consulting in Argentina before earning his PhD from the Stanford Graduate School of Business in 2005. Prior to coming to Haas he was an assistant professor in economics at the University of Chicago. "My main interests are in problems related to coordination and/or asymmetric information. My approach to these problems draws heavily on game theory and dynamic contracts," Fuchs says, describing his work. However, he adds, "If I were not an economist, I would try to be a chef, a professional snowboarder, or a safari tour guide."

Ming Hsu returns to the West Coast; he received his PhD in social sciences at the California Institute of Technology. In 2006, he accepted a teaching position at the University of Illinois at Urbana-Champaign, where he was also an affiliated faculty member of the university’s Beckman Institute and Neuroscience Program. Hsu’s research focuses on behavioral economics, experimental economics, and neuroeconomics — the study of the brain in emotional responses and decision making. As a member of the Haas marketing group, Hsu will continue to conduct marketing research from a "neuroeconomics" perspective. "The goal of my research is to under¬stand the behav¬ioral and neural basis of eco¬nomic decisionmaking," says Hsu.

Atif Mian arrives at Haas to join the Fisher Center for Real Estate and Urban Economics. Mian studies links between financial markets and the macro-economy. His recent work focuses on the underlying causes of the recent financial crisis in the US and seeks to understand the broader connection between asset prices, consumer credit, and the real economy. Mian earned his PhD in economics at MIT and became a faculty member at the University of Chicago’s Booth School of Business in 2001. He has spent the past four years as an associate professor of finance. He is currently the co-recipient of a three year National Science Foundation Research Award (2008-2011) for studying the relationship between asset prices, household borrowing, and consumption in the US.

Leif Nelson comes to the Haas Marketing Group with expertise in consumer judgment and decision making. His work examines how social and environmental factors influence consumption choice and consumption experience. Earlier this year, Nelson’s work appeared in several major media outlets, including the New York Times, Washington Post, TIME, CNN and ABC News. He and his co-authors found that advertisements can actually make it more enjoyable to watch TV. Nelson received his PhD in psychology from Princeton University before becoming an assistant professor of marketing at NYU’s Stern School of Business and most recently at the University of California, San Diego’s Rady School of Management. Of his personal interests, Nelson says, "I am a former radio DJ. I play guitar – poorly. I knit – worse."

What makes stock prices move? That’s a million-dollar question, and one that Haas School Professor Richard Sloan poses and answers in his recent paper "Investor Recognition and Stock Returns" (co-authored with Professor Reuven Lehavy, University of Michigan). Sloan maintains investor “recognition,” not earning results and related fundamentals, are the driving force — accountable for more than 50 percent of explainable stock price variations.

In his research, Sloan explains that the conventional textbook approach to stock valuation is to study a company’s fundamentals, such as cash flow and the return on assets. Contrary to convention, Sloan’s work proves that sentiment and emotion among investors carry unexpected clout.

“Efficient market theories say sophisticated arbitragers would step in to keep the prices in line with fundamentals, and we show that doesn’t happen. When a lot of investors get excited about a stock, the price moves accordingly,” says Sloan, who holds the L.H. Penney Chair in Accounting and studies the relation between accounting information and stock returns.

As outlined in the paper, Sloan observed that news about fundamentals, including earnings announcements and revisions in analysts’ forecasts of future earnings, account for only about 30 percent of explainable variation in stock returns. The remaining 70 percent is explained by changes in investor recognition, which Sloan defines as the number of investors who know about a stock and hence consider it for their portfolio. For instance, a well-known stock such as Google or Apple has very high investor recognition.

To investigate the “investor recognition” theory, Sloan tracks quarterly changes in the number of institutional investors owning specific stocks, using data going back over the past 20 years to 30 years. Sloan says the results provide striking support for the investor recognition hypothesis, with increases in the number of investors holding a stock providing a much greater impact on stock price than increases in fundamentals for the underlying company. Sloan’s results also indicate that changes in investor recognition are particularly important for stocks in smaller and riskier companies.

Sloan says the results are “both striking and surprising, because we teach that stock markets are efficient and based on fundamentals.” The results suggest that investors, analysts, and corporate managers should pay attention to changes in investor recognition. They also shed light on why companies hire investor relations professionals and investment bankers and explain why non-fundamental events, such as index additions and initiation of analyst coverage, cause stock prices to increase.

Professor Pablo Spiller became the first non-Yale Law faculty member appointed editor-in-chief of the Journal of Law, Economics and Organization (JLEO) on Aug. 1.

Spiller, the Jeffrey A. Jacobs Distinguished Professor in Business and Technology and a member of the Haas Business and Public Policy Group, previously served as a co-editor of JLEO since the mid-1990s.

Spiller’s appointment as editor-in-chief carries no term limit. Another Haas professor, John Morgan, is also a co-editor of JLEO.

The Lester Center for Entrepreneurship and Innovation has created a new step-by-step directory for students that outlines all of the opportunities and offerings available to help budding entrepreneurs get their businesses off the ground.

The center's new UC Berkeley Venture Launchpad is a platform designed to propel entrepreneurship through the entire lifecycle of developing a business, from idea creation to going live.

“The new venture creation process is the very soul of the Bay Area entrepreneurial experience,” says Lester Center Co-Faculty Director Jerome Engel. “For many students, creating their own enterprise is the critical goal they hope to achieve during their time at Haas. We help students build businesses from scratch in a way that greatly increases their chances of success in the marketplace and invigorates the economy.”

While several components of the Venture Launchpad have been in place at the Lester Center for many years, this new initiative more clearly delineates which component can help an entrepreneur at one of seven stages of entrepreneurship.

"The UC Berkeley Venture Launchpad initiative takes everything that’s great about Haas and brings it to a new level, with one objective: speeding up the delivery of innovation," says Kevin Brown, a Lester Center advisory board member, who credits Haas with being critical to launching his first startup, Inktomi. "The Launchpad provides access to a unique blend of accelerants — including hands-on guidance from top Berkeley faculty, a strong alumni and venture capital network, and best-practice resources — and makes them all available in a repeatable framework.”

The Venture LaunchPad begins with stage 1 – find an idea worth pursuing – and ends with stage 7 – launch! Along the way, student-entrepreneurs work toward stage 7 by taking advantage of the wide variety of opportunities at the Lester Center, which include helping to run or participating in a business plan competition, competing for a Lester Center fellowship, or meeting with a venture capitalist during special office hours.

Through generous support from the center’s advisory board, Engel and his team have already raised more than $400,000 for the Venture Launchpad, which is available to students this fall. The center has plans to raise a total of $15 million for all of its programs over the next four years.

Solar energy expert Cyrus Wadia, who joined the Haas School’s professional faculty this fall as co-director of the Cleantech to Market program, was recognized today by MIT’s Technology Review as one of the world’s top innovators under 35.

Wadia, 34, was chosen for the TR35 list for identifying materials that could be unexpectedly useful in solar cells, the Technology Review wrote. Wadia’s goal is to make solar energy affordable and accessible to everyone on the planet, especially to the 1.2 billion people now living without electricity.

The TR35 list is published by Technology Review, a publication of the Massachusetts Institute of Technology (MIT). Selected from more than 300 nominees by a panel of expert judges and the editorial staff of Technology Review, the annual TR35 list is an elite group of accomplished young innovators whose work spans medicine, computing, communications, and nanotechnology.

In addition to his Haas appointment, Wadia serves as a guest scientist at the Lawrence Berkeley National Laboratory’s Material Sciences Division. He earned his PhD at UC Berkeley’s Environmental Resources Group.

"I am very honored to receive this award," says Wadia. "This recognition validates our approach to scalable, low-cost photovoltaics and will raise awareness of our research to the wider scientific community. If we are to deliver solar power to 7 billion people, then we need to change the way we think about material resource constraints and design a new paradigm for everything that goes into a finished solar cell."

To reach this goal, Wadia and his colleagues are developing photovoltaic solar cells from naturally occurring materials such as iron sulfide and copper sulfide that are abundantly available. These materials could serve as alternatives to materials that are currently used to make solar cells, which have drawbacks that could limit their widespread implementation.

To make solar energy affordable to everyone — which Wadia believes means delivering electricity as low as 75 cents per watt — he and his colleagues are developing synthetic pathways to create copper sulfide and iron sulfide nanostructures. These are the building blocks for a new generation of low-cost solar cells.

So far, they’ve demonstrated the first working solar cell from copper sulfide nanocrystals and the first all inorganic nanocrystalline solar cell to be processed and deposited on a flexible substrate. They’ve also demonstrated a novel approach to synthesizing high-purity iron pyrite, which in the future may be used in a photovoltaic device.

Wadia and the other TR35 winners for 2009 will be featured in the September/October issue of Technology Review magazine and honored at an event held at MIT Sept. 22-24.

More on Wadia’s recognition and the other TR35 winners
More on Wadia’s work
Wadia’s Haas faculty bio

Senior Lecturer Cristina Banks was recently honored with an Innovative Practice Award Presidential Citation from the American Psychological Association for her work in the application of psychology in consulting.

Banks was recognized for her work in determining whether jobs are properly classified as "exempt" from overtime pay. In 1997, Banks created a new methodology to determine proper job classifications. Over the last 12 years, she has performed more than 100 studies applying this methodology to the workplace to help mediate and resolve wage and hour lawsuits.

This new application of job analysis has resulted in millions of dollars of savings to employers as well as millions of dollars of compensation to employees who were inappropriately classified as "exempt," says Banks, a member of the Haas Organizational Behavior and Industrial Relations Group.

Banks’ job analysis uses observational studies to track tasks performed and time spent on tasks approach and questionnaire studies to gather self-reports of time spent on tasks.

"This methodology allowed precise calculations of percent time spent," Banks explains. "It essentially gave employers a defense for these class-action lawsuits, and it also gave employers a way to conduct self-audits to avoid litigation."

(Republished with the permission of writer Stephany Schings, Society for Industrial and Organizational Psychology.)

Professor David Vogel has been named an international research fellow at the Oxford University Centre for Corporate Reputation.

Vogel is among a group of about 40 international research fellows from academic institutions around the world that the center is appointing. The new fellows are being selected on the basis of their relevance to the center's work and will be invited to come to Oxford University annually for an international symposium on reputation.

In addition to having the opportunity to interact with a wide range of international researchers, Vogel says he anticipates his work with the center will assist him in preparing a new MBA class on crisis management that he plans to offer next year. Vogel is the Soloman P. Lee Chair in Business Ethics and a member of the Haas Business and Public Policy Group.

The Oxford University Centre for Corporate Reputation was established by Oxford's Said Business School in 2008 to promote a better understanding of the way in which the reputations of corporations and institutions around the world are created, enhanced, and protected.