Category: News Releases

Former Haas Dean Rich Lyons named new UC Berkeley chancellor

| by Haas News
man wearing a suit and tie standing on balcony in front of trees
Rich Lyons at home in the Berkeley Hills. Photo: Keegan Houser/UC Berkeley

Rich Lyons, former dean of the Haas School of Business and UC Berkeley’s current associate vice chancellor and chief innovation and entrepreneurship officer, has been selected to become UC Berkeley’s next chancellor.

Lyons will assume his new role on July 1, 2024, when current Chancellor Carol T. Christ retires.

University of California President Michael V. Drake announced his selection and the UC Board of Regents approved the appointment during a special meeting held today at UCLA. Lyons, who has devoted most of his career to UC Berkeley, will be the university’s 12th chancellor, notably the first UC Berkeley undergraduate alumnus since 1930 to become the campus’s top leader.

“I am naturally humbled and thrilled to be serving alongside all of you in this role,” Lyons said after the appointment was announced. “The University of California, as we know, is not just one of this country’s most important assets; it’s one of the world’s most important assets, and we steward that asset, and that is an enormous responsibility.”

“The University of California as we know is not just one of this country’s most important assets; it’s one of the world’s most important assets, and we steward that asset, and that is an enormous responsibility.” – Rich Lyons.

Christ lauded his appointment. “I am both thrilled and reassured by this excellent choice,” she said. “In so many ways, Rich embodies Berkeley’s very best attributes, and his dedication to the university’s public mission and values could not be stronger. I am confident he will bring to the office visionary aspirations for Berkeley’s future that are informed by, and deeply respectful of, our past.”

Members of the UC community congratulated Lyons and spoke on his behalf during the meeting, including Jo Mackness, MBA 04, an associate vice chancellor at UC Berkeley and a staff advisor to the UC Regents. “As an economist, as a finance professor, you bring the financial acumen and the creativity that will be required to finance UC Berkeley’s future,” Mackness, who formerly served as chief strategy and operating officer at Haas under Lyons, said. “And as good as you are at vision and strategy, you understand Peter Drucker’s old adage that culture does eat strategy for breakfast, and you are deeply committed to creating an organizational culture where it’s OK to question the status quo.”

Lt. Gov. Eleni Kounalakis, MBA 92, commended Lyons’ extraordinary talent for fundraising, recognizing the passion Lyons brought to Haas “and your belief and your faith in the business school and how effective you were at bringing other people along to help achieve the vision you set forth.”

Deep Berkeley roots

Lyons, who grew up in Los Altos, arrived on the Berkeley campus as an undergraduate. He earned his bachelor’s degree in business and finance with highest honors in 1982 and went on to earn a Ph.D. in economics from MIT in 1987. After six years teaching at Columbia Business School, Lyons returned to Berkeley in 1993 to join the faculty as a professor of economics and finance.

“No institution has come anywhere close to Berkeley in terms of shaping my life,” Lyons told UC Berkeley News this week. “There’s this favorite phrase of mine: ‘You can’t be what you can’t see.’ Neither of my parents had a four-year degree when I arrived at Berkeley. For so many reasons, in so many ways, I could have never seen the life I have lived were it not for my undergraduate years at Berkeley.”

As an international finance professor, Lyons was a six-time recipient of the Cheit Award for Excellence in Teaching—the school’s top teaching honor—and also won UC Berkeley’s highest teaching award in 1998. In 2006, he took a leave to serve as chief learning officer for Goldman Sachs, focusing on leadership development among managing directors and partners.

Lyons returned to Berkeley in 2008 to serve as dean of the Haas School of Business. During his tenure as dean, Lyons oversaw the construction of Connie & Kevin Chou Hall, a state-of-the-art academic building that opened in 2017. He also forged stronger ties with other UC Berkeley colleges and departments, with a focus on dual degree programs that combine business with STEM fields, including the new Management, Entrepreneurship, and Technology program with Berkeley Engineering.

man speaking at a podium in Haas courtyard
Former Haas dean Rich Lyons at the naming ceremony for Connie & Kevin Chou Hall, which opened in 2017. Photo: Noah Berger

While leading Haas, Lyons is perhaps most well known for his creation of four distinct Defining Leadership Principles that spurred a sweeping cultural initiative at the school that stands out in the minds of many.

“We had never made anything explicit,” about the culture at Haas, Lyons said in an interview with Poets & Quants in 2018. “That felt like a giant opportunity so I began to ask myself, ‘What would being truly intentional on culture look like?'” The values that emerged: Question the Status Quo, Confidence Without Attitude, Students Always, and Beyond Yourself, have inspired and influenced students and alumni alike.

Speaking at today’s meeting, Lyons noted how the Haas culture has spread across the Berkeley campus, so “that when the chancellor of Berkeley says we are all about questioning the status quo—this mindset that there’s got to be a better way to do this—nobody bats an eye because it’s part of where we come from.”

An innovative changemaker

In January 2020, Lyons became Berkeley’s first chief innovation and entrepreneurship officer. In that role, Lyons worked to expand and champion Berkeley’s innovation and entrepreneurship activities. To that end, he helped launch the Berkeley Changemaker program in 2020, which now boasts some 30 courses that help undergraduates see innovation and entrepreneurship in action. The courses have quickly become among the most popular academic offerings on campus.

Lyons is particularly proud of the startup ecosystem on UC Berkeley’s campus. When UC Berkeley took the top spot last year for the number of venture-funded startups founded by undergraduate alumni, Lyons said he wasn’t surprised, noting that support for UC founders has accelerated dramatically over the past 20 years.

Noting Lyons’ unique focus on innovation in science and technology, Dean Ann Harrison, who succeeded Lyons as Haas dean, said he exemplifies “what is uniquely great about Berkeley.”

“This will be a historic new era, building on the strength of the foundation set by Chancellor Christ and leading to ever-greater achievements for Berkeley and its community,” Harrison said.  “As my predecessor in the Haas deanship, Rich inspires me every day; as a friend and colleague, he enhances my life and that of everyone around him. I am truly delighted by this news and look forward to collaborating with him on a whole new level.”

Berkeley Haas experts launch ‘The Culture Kit’ podcast with insights to improve workplace culture

| by Laura Counts
A man and woman sit at a table wearing headphones and speaking into podcasting microphones.
Photo: Jim Block/Berkeley Haas

Berkeley, Calif.—The world of work is a work in progress. Hybrid work arrangements, emerging AI tools, ongoing layoffs, and an increasingly diverse pool of workers who want a voice and a sense of belonging at work—managers have a lot on their plates.

Illustration shows a toolkit with monkey wrench, tape measure, level, and clue. Text reads The Culture Kit with Jenny & Sameer.In their new podcast “The Culture Kit™  with Jenny & Sameer,” organizational culture experts Jenny Chatman and Sameer Srivastava tackle questions from business leaders wrestling with the seismic changes underway in the world of work. 

Chatman and Srivastava are professors at UC Berkeley’s Haas School of Business who have dedicated their careers to studying and advancing workplace culture. In each 15-minute podcast episode, they draw on the latest academic research and their years of experience advising organizations around the world and share concrete strategies to improve workplace culture.

“What I’m most excited about with this podcast is that it brings together the worlds of academic research and industry practice,” says Srivastava, the Ewald T. Grether Professor of Business Administration and Public Policy. “Here, we get to take a deeper dive into a specific problem raised by a specific leader and really workshop it together.”

“Here, we get to take a deeper dive into a specific problem raised by a specific leader and really workshop it together.”

The podcast is an extension of the work that Chatman and Srivastava started six years ago when they launched the Berkeley Center for Workplace Culture and Innovation to bring emerging insights from academic research to business practitioners. 

“With our new podcast, we hope to expand the reach of the work we’ve been doing through a new medium with the goal of reaching more people,” says Chatman, Paul J. Cortese Distinguished Professor of Management and Berkeley Haas associate dean for academic affairs. “Business leaders can submit culture ‘fixit tickets’ laying out the topics on their minds. Our goal is to give them actionable steps they can take to improve their organization’s culture.”

Season 1 of The Culture Kit with Jenny & Sameer launched today and includes thoughtful questions from industry leaders such as WD-40 CEO Steve Brass, Hubspot CEO Yamini Rangan, and former Google SVP of People Operations Laszlo Bock. New episodes will be released every two weeks on major podcast networks.

The Culture Kit with Jenny & Sameer is a production of the Haas School of Business, the Berkeley Center for Workplace Culture & Innovation and Professors.FM, a new podcast network helping you make sense of the world with top scholars. Professors.FM is a collection of scholar-hosted shows that bring insights from research and make them relevant to today’s world.

About the Haas School of Business

As the second-oldest business school in the United States, the Haas School of Business at the University of California, Berkeley has been questioning the status quo since its founding in 1898. The school is one of the world’s leading producers of new ideas and knowledge in all areas of business. Located within the world’s top public university, Berkeley Haas is at the heart of what’s next in the Bay Area’s rich innovation ecosystem. Learn more about our six degree programs, our exceptional faculty members—including two Nobel Laureates in economics—and our community of big thinkers: haas.berkeley.edu.

About the Berkeley Center for Workplace Culture and Innovation  

The Berkeley Center for Workplace Culture and Innovation aims to usher in the next generation of organizational culture research, one that draws on a wide range of data sources and computational methods to uncover different facets of culture within and across organizations and industries. The center partners with organizations and academics from a wide diversity of disciplines and industries to lead these efforts, with the ultimate goal of leveraging research insights to help organizations function more effectively and advance academic understanding. The Culture Connect Conference, held in January each year, convenes leading academic researchers studying organizational culture and company leaders to deepen the dialogue about how to address culture-related challenges. Lean more about the Berkeley Center for Workplace Culture and Innovation. 

Contact: 

Laura Counts, [email protected], 510-643-9977

New center aims to create healthcare innovation research-to-impact pipeline

|By Rachel Leven

The Center for Healthcare Marketplace Innovation aims to shape the future of AI in healthcare through groundbreaking economic research, data partnerships and more.

Associate Professor Jonathan Kolstad will serve as faculty director of the new center (Photo: Copyright Noah Berger / 2023).

UC Berkeley experts are developing a trailblazing infrastructure to translate cutting-edge AI and behavioral economics healthcare research into powerful real-world advances in patient outcomes and drastically reduced medical costs.

The Center for Healthcare Marketplace Innovation, announced today by the College of Computing, Data Science, and Society and the Haas School of Business, will act as a force multiplier for top-tier technological innovation and economic insights. Developing and using the research on healthcare innovation incentives will lead to the creation and deployment of interventions that meaningfully improve public health.

Artificial intelligence (AI) is widely expected to transform healthcare. The new Berkeley center aims to play an essential role in ensuring those innovations benefit the public. AI tools could enhance care quality by, for example, helping triage patients in emergency rooms, diagnosing diseases and coaching clinicians. These technologies can also help reduce the 15% to 30% of health care spending that goes towards administrative functions each year, said Jonathan Kolstad, the center’s faculty director. That means up to $250 billion less in annual spending and more time focused on improving patient care. Still, this moment also carries risk.

“AI is going to be central to healthcare delivery in 10, 15 years from now,” said Kolstad, a professor of economic analysis and policy at Berkeley’s business school. “We’re at this inflection point. By understanding the technology, the systemic incentives and the human abilities in the healthcare system, we have a tremendous opportunity to help shape those dynamics.”

“We’re at this inflection point. By understanding the technology, the systemic incentives and the human abilities in the healthcare system, we have a tremendous opportunity to help shape those dynamics.” —Professor Jonathan Kolstad

“I think it matters whether and how those tools get built to actually enhance care delivery and help patients, and whether they are built in equitable, ethical ways because they’re started in places like Berkeley,” he said.

The center’s faculty are the right experts to lead this charge. Kolstad and faculty affiliates like Ziad Obermeyer are already award-winning academics in their respective fields, founders of healthcare innovation startups, and experts called upon by California and federal leaders to inform healthcare policies and regulations. Obermeyer is an associate professor at Berkeley’s School of Public Health.

This expertise enables them to build unique research and data resources and foster interdisciplinary incubation and industry and policy collaborations. Berkeley’s all-around excellence amplifies their potential impact. With connections to ambitious initiatives like the UC San Francisco-UC Berkeley Joint Program in Computational Precision Health and the open platforms initiative recently launched by CDSS, the new center can support other leading thinkers in moving their research from breakthrough papers into impact for public good. 

“Berkeley’s leadership in disciplines across computing, public health and economics and dedication to making real-world impacts make it the obvious home for this exciting initiative,” said Jennifer Chayes, dean of the College of Computing, Data Science, and Society. “The Center for Healthcare Marketplace Innovation will enable those at the intersection of healthcare economics and policy to join together with clinical and computing researchers to redefine success in healthcare outcomes.” 

“Harnessing AI to make our healthcare system work for people and ensure patients get better care requires a truly interdisciplinary approach,” said Ann Harrison, dean of the Haas School of Business. “I am very excited to see some of Berkeley’s great minds and cutting-edge resources come together at the new Center for Healthcare Marketplace Innovation.”

The center’s foundational development was made possible through a generous philanthropic donation by an anonymous thought partner. CHMI will be housed within the Institute for Business Innovation at Berkeley Haas.

A ‘bench-to-product’ runway

As society shifts to a new era of healthcare where AI plays a larger role, understanding human decision-making will remain central to discovering and applying useful solutions. The center aims to connect expertise in behavioral economics with the advanced research and development being executed at Berkeley to help develop healthcare solutions that people and companies want and will harness.

The center will focus on three pillars: conducting research to advance the science of innovation incentives in healthcare; encouraging interdisciplinary collaboration on projects and solutions; and partnering with healthcare providers, insurers, government agencies and others to test and refine the novel interventions.

Kolstad hopes this will be the “bench-to-product runway” that the increasingly technical and interdisciplinary AI, computer science and behavioral science need to be translated from research into impact.

“There’s a lot of really cool computational stuff happening, but it’s being built with very little understanding of the actual function of the healthcare system – of the complicated incentives of what it would take to have an algorithm, a prediction model, a solution be deployed to really change either healthcare outcomes or costs,” said Kolstad. “This kind of center that works to bridge these mechanisms can be very, very influential.”

“We want to take all of this intense energy and interest in AI and health and make sure that’s turning into benefits for patients and for the healthcare system.” —Ziad Obermeyer

Obermeyer’s work offers a blueprint of what the center’s impact could look like in practice. Through his research, Obermeyer found there was a need to improve physicians’ diagnoses of a patient’s probability of heart attack, an action that can trigger tests and other urgent care. Working with a major healthcare system, he developed an algorithm that could support doctors in emergency rooms as they screen patients and make crucial life or death decisions.

But will that algorithm work in practice? Obermeyer intends to find out. He’s now conducting randomized trials to see if the machine learning method he developed for an academic paper can become a real-world medical solution used in emergency rooms.

“We’re seeing so many papers come out in this area. I don’t think we’ve seen the impacts we want to see from those academic projects,” said Obermeyer, an affiliated faculty member of the Computational Precision Health program. “I think it’s because of that different skill set and because of the difficulties of translating academic ideas into the world.”

“We want to take all of this intense energy and interest in AI and health and make sure that’s turning into benefits for patients and for the healthcare system,” he said. 

Increasing access to industry data, feedback

The Center for Healthcare Marketplace Innovation is just getting started, but already its docket is stacked with ambitious projects. 

For example, the center is close to signing multiple large-scale, multimodal data access agreements with healthcare partners. The data is typically tightly held, and it can take years for academics to access it, Obermeyer said. That limits what research can be done to tackle health problems and the usefulness of related AI, which is only as good as the data it has access to train on, he said. Making it easier to access that data – and keeping it secure and used ethically – will unleash possibilities for research and impact in computational health. 

The center is also setting up an industry feedback platform, where large healthcare providers and others can share with researchers what problems they’re trying to solve for their patients, clinicians and systems. This input could lead to research and provide on-the-ground insights to inform the center’s efforts.

Additionally, the center will soon begin piloting a new generative AI model that offers clinical coaching to medical professionals. And it’s hosting an economics and policy conference – the Occasional California Health Economics Workshop – on March 8. 

These initiatives offer a glimpse of the new path forward the center is trying to create at Berkeley for this research, these industries and society.

“The future of AI and healthcare needs behavioral incentives, technological breakthroughs and data,” said Kolstad. “We’re working to bring those together.”

 

This article was also published by the College of Computing, Data Science, and Society with the headline “New center aims to create healthcare innovation research-to-impact pipeline.”

Media contact:

Laura Counts, Haas School of Business, [email protected]

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Berkeley Haas launches O’Donnell Center for Behavioral Economics to lead the next generation of research

|By Mickey Butts

Established with a philanthropic investment of almost $17 million from Robert G. and Sue Douthit O’Donnell, the new center will bring together the best minds from a wide range of fields.

An aerial view of the Haas School of Business campus showing a wide staircase leading up to an arched entry between two buildings.

Berkeley, Calif.—Ever since Nobel laureates George Akerlof and Daniel Kahneman created a 1987 UC Berkeley course that broke the rigid barrier between psychology and economics, the university has led the way in bringing the once-disparate disciplines together into the field of behavioral economics.

More than 35 years later, the Haas School of Business is launching the Robert G. and Sue Douthit O’Donnell Center for Behavioral Economics to advance the field toward its next stage of evolution.

Portrait of a woman with shoulder-length dark blond hair and purple blazer.
Professor Ulrike Malmendier (Photo: Copyright Noah Berger)

“We went from neoclassical economics that considered humans to be perfectly rational, to behavioral economics that brought in social psychology,” says Ulrike Malmendier, the Cora Jane Flood Professor of Finance, who will serve as the center’s faculty director. “Now we want to move the needle further, bringing together the best minds for rigorous research on human behavior from the sciences more broadly—including neuroscience, cognitive science, biology, medicine, epidemiology, and genetics.”

Funded with a philanthropic investment of almost $17 million by Bob O’Donnell, BS 65, MBA 66, and his wife, Sue O’Donnell, the center aims to become the preeminent hub for the maturing fields of behavioral economics and finance, bringing together leading researchers from a wide range of disciplines for collaboration, conferences, and bootcamps, as well as funding promising PhD students and postdoctoral scholars. The center will also host the prestigious Behavioral Economics Annual Meeting (BEAM), co-founded by Malmendier, every three years.

A nexus for cross-disciplinary research

O’Donnell says he was inspired by the pioneering work of Kahneman, Akerlof, Malmendier, and others who gave Berkeley its leading position in behavioral economics. “UC Berkeley is dedicated to integrating business education with other disciplines on campus, which is essential in this area,” he says. “It should have a center devoted to continuing this work.”

The center, says Berkeley Haas Dean Ann Harrison, will create a far-reaching impact across UC Berkeley, a research powerhouse with many areas of strength. “The goal is to cut through barriers that traditionally hinder research across disciplines, such as different ways of presenting data and publishing results, and bring people together in a different way than what’s usually done,” she says. “The O’Donnell Center will be the nexus of a new form of cross-disciplinary collaboration that pushes behavioral economics toward the future.”

Beyond ‘homo economicus’

Traditional economics was based on the assumption that human beings are perfectly rational, profit-maximizing “robots”—sometimes referred to as “homo economicus” or “economic man,” Malmendier says. Behavioral economics brought in insights from psychology and human behavior to explore the predictable foibles in our thinking, such as decision-making biases, fears of losing out, lack of self-control, and overconfidence. A classic example is Kahneman’s pioneering work with Amos Tversky on loss aversion, which showed that people are willing to take greater risks to avoid a loss than to secure a gain.

These ideas have been integrated into economics and finance departments around the world and have deeply influenced public policy and practice. For example, after Nobel Laureate Richard Thaler and Cass Sunstein developed the concept of the “nudge”—interventions that spur people to act in their own self-interest, such as enrolling in a retirement savings plan—hundreds of “nudge units” were established in governmental and private-sector organizations around the world.

Many other Berkeley Haas researchers helped pioneer this intellectual revolution, including finance professor Terrance Odean, BA 90, MS 92, PhD 97, the Rudd Family Foundation Chair, who was convinced by Kahneman to pursue a doctorate in finance rather than psychology and whose work reveals investors’ flawed decision making.

O’Donnell, the center’s founding donor, says he often applied insights from behavioral economics during his career as a portfolio manager for a large mutual fund group. “It represents a further step in the evolution of financial theory comparable to the development of the efficient market hypothesis,” he says. “When combined with existing financial theory, I believe that its insights enhanced results for my clients.”

Yet, during the 17 years he taught an investment class in the Berkeley Haas MBA program, O’Donnell says he sometimes encountered skepticism when he introduced ideas from the field. “Indeed, one student asked, ‘Isn’t all this kind of woo-woo?’”, he says. “Several years later, that student told me how perspectives from behavioral economics had helped her career in finance.”

Experience effects

Now, after more than three decades of foundational work, it’s time to move behavioral economics past its adolescence, Malmendier says. “Behavioral economics made progress by including psychology, but we didn’t include all the other sciences.”

Malmendier, whose groundbreaking work on “experience effects” earned her a Fischer Black Prize in 2013 for the top economist under the age of 40 and a Guggenheim Fellowship in 2017, has focused on complex economic behaviors. She has studied how stressful experiences with recessions, layoffs, inflation, housing bubbles, and political repression make consumer and investor behavior more cautious and risk averse for years afterward, and she has explored how stress can affect our health, careers, education, and other aspects of life in dramatic ways.

To further that work, Malmendier aims to bring a wider range of researchers together and break down silos. For example, collaborating with neuroscientists, neuropsychiatrists, biologists, medical researchers, and epidemiologists who have studied stress and trauma could more precisely demonstrate how past experiences shape our actions today and across generations. Stress impacts the big variables that economists study, such as completing an education, choosing an occupation, and deciding to have a family, she says.

“As we walk through life, our outlook on the world changes, especially if we suffer trauma,” she says. “Neuroscience says our brain gets rewired. There may be a long-term impact of stress on our longevity, on our aging, and on our health.”

Questioning the status quo

Malmendier, who now serves on the German Council of Economic Experts, is passionate about the potential of behavioral economics to help leaders create better solutions to the most complex and urgent problems of our time—from fighting climate change to battling inflation and avoiding financial crises. “If leaders keep in mind people’s emotions, their personal histories, and their psychologies, they can engineer ways to make things more predictable and give people more control over events help them live better lives,” she says. “That is our ultimate goal.”

Photo of a man with light skin, short brown hair, and glasses, wearing a navy blue jacket with white collared shirt.
Professor Stefano DellaVigna

Moving the field forward will also involve rigorous research to reexamine what has come before. For instance, a recent paper by center co-founder Stefano DellaVigna, the Daniel E. Koshland Senior Distinguished Professor of Economics and professor of business, with Elizabeth Linos of Harvard, suggests that leaders should get more realistic about nudge policies—and better at incorporating them into practice. Two government nudge units opened their records to allow the researchers to look at all their interventions. By examining 126 randomized controlled trials of nudge policies involving 23 million people in the United States, the researchers found that nudge interventions are on average effective, increasing the desired outcomes by about 8%. However, the effects are less than those in published academic papers—about one-fifth the size. The authors attribute the difference to publication bias, or the tendency toward publishing only large, surprising results.

“Our study stresses the importance of research transparency,” DellaVigna says. “This transparent access is quite unique and shows a further innovative impact of behavioral economics, which has led to more evidence gathering within governments.”

In a second paper, DellaVigna and Linos, along with Department of Economics doctoral student Woojin Kim, found that even when nudge policies are found to be effective, public agencies implement them only about a quarter of the time, often due to organizational inertia.

In addition to Malmendier and DellaVigna, the center will include a host of affiliated researchers from Berkeley Haas and Berkeley Economics, as well as from across the university. They include Berkeley Haas professors Ricardo Perez-Truglia, Ned Augenblick, Don Moore, and Gautam Rao, PhD 14—who will join Haas in January from Harvard University—as well as Dmitry Taubinsky of Berkeley Economics and others. The founding gift will establish a permanent endowment to support the center and some of its ongoing activities.

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Media Contact: Laura Counts, [email protected], 510.205.9570

Largest gift in Berkeley Haas history will transform undergraduate business program from two to four years

| by Haas News

Berkeley, Calif.— The Haas School of Business, University of California, Berkeley, today announced that its top-ranked two-year undergraduate business program will expand to become a four-year program, supported by the largest single gift in the school’s history.

In recognition of the $30 million gift from Haas alumnus Warren “Ned” Spieker, BS 66, and his wife, Carol, BA 66, (political science), UC Berkeley will name the Haas School’s four-year undergraduate business program the Spieker Undergraduate Business Program. The first four-year cohort of students will enroll in August of 2024.

Haas alum Ned Spieker
Ned Spieker, BS 66, and his wife, Carol, gave a record $30 million to Haas to transform the undergraduate program. Photo: Karl Nielsen

“A four-year undergraduate business experience will provide remarkable new opportunities for students,” said Ned Spieker, a Haas School Board member who is founder and former Chairman and CEO of Spieker Properties, one of the largest owner-operators of commercial property in the U.S. “My hope is that this gift will help build a program that’s second-to-none in the world, cementing Haas as the top undergraduate business school for generations to come.”

“This is a historic, game-changing investment in undergraduate business education,” said Berkeley Haas Dean Ann E. Harrison. ”We are so thrilled that Ned and Carol have made a commitment to Haas toward building the next generation of business leaders.”

Historically, students have applied to the Berkeley Haas Undergraduate Program as sophomores and enrolled as juniors. Now, prospective Berkeley students will have the option to apply directly to Haas and enter as freshmen, giving them an additional two years for deeper learning, including career development, study abroad opportunities, entrepreneurship programs, capstone projects, mentorship engagements, and internships. While the majority of undergraduates will enter as freshmen in the future, continuing UC Berkeley and transfer students may continue to apply for acceptance to the program as sophomores.

Delivering impact

The Spiekers’ gift will be used to deliver impact in five areas critical to supporting the program, including:

  • Endowing a new scholars program
    The new Spieker Scholars Program will attract the best and brightest undergraduate students. These students have challenged themselves academically throughout their high school experience and demonstrated exceptional leadership skills through athletic and co-curricular pursuits, their commitment to creating a positive social impact in their communities, and their curiosity for learning outside of the traditional academic setting. Spieker Scholars, three to four chosen per class, will receive significant financial support and enrichment opportunities. In addition to the Spieker Scholars Program, this gift will fund an expansion of the scholarships available for students who may have financial barriers to attending UC Berkeley.
  • Building outreach and support
    Outreach efforts will be expanded to ensure that high-performing students from all backgrounds consider Haas. A first-year academic advisor will work with admitted students, providing the knowledge and resources required to navigate the university system. Students will also have access to preparatory courses that will build their foundational knowledge around business concepts and strengthen their quantitative skills.
  • Creating a life-changing student experience
    Haas will increase staffing for academic and admissions advising, mental health services and support, marketing and admissions, alumni outreach, and student orientation. These additional touchpoints will ensure that undergraduate students are maximizing their time within the ecosystem of Berkeley Haas and developing deep relationships with the alumni community.
  • Providing new co-curricular opportunities
    Funds will be used to support student activities such as experiential learning workshops, international research, travel opportunities, social gatherings, student conferences and competitions, and additional leadership opportunities.
  • Enhancing classroom technology and infrastructure
    To provide students a state-of-the-art learning experience, classrooms in Cheit Hall, where many undergraduate students take classes, will be upgraded with the latest audio, visual, and media equipment.

A crucial role in campus planning

Ned Spieker, who is also founder and chairman of Continuing Life communities, which operates large-scale communities for seniors in California, met his wife, Carol, at UC Berkeley. Their four children are Cal grads. Carol Spieker, an Emeritus Trustee of the UC Berkeley Foundation, has served on the governing board of Filoli, a National Historic Trust property, and as chairman of the board of Sacred Heart Schools.

For years, Ned Spieker has played a crucial role in Haas campus planning, convincing the administration of the importance of maximizing its campus footprint. Spieker served as a catalyst and champion for the construction of Haas’ newest building, Chou Hall. Recently, Spieker shifted his efforts to the undergraduate program.

The undergraduate program has added three multidisciplinary programs and one minor outside of the core program over the past several years. The new programs include:

Early support

The expanded four-year undergraduate program has also received a number of gifts from other generous supporters, which helped bring the total raised so far to more than $45 million (including the Spieker gift). Early supporters include Janelle Grimes, BA 86, (political science), and Michael Grimes, BS 87, (electrical engineering and computer science). Michael Grimes, the M.E.T. program’s founding donor, played an instrumental role by working with Berkeley Haas as a founder of the four-year undergraduate program. Additional program supporters include Steve Etter, BS 83, MBA 89; Maria and Gene Frantz, BS 88; Joanne and Jon Goldstein, BS 82; Melissa and Clif Marriott, BS 99; Adria and Brian Sheth; Roshni and Jagdeep Singh, MBA 90; and Melody and Jerry Weintraub, BS 80, MBA 88.

The Berkeley Haas Undergraduate Program was founded in 1898, the same year the business school (then called the College of Commerce) was established. As the second-oldest business school in the United States, Berkeley Haas provides research, thought leadership, and talent development to lead the way to a more inclusive and sustainable future.

Read an FAQ about the new program here.

 

Same Berkeley MBA without the commute: Berkeley Haas now offers flexible online option

|By Ute Frey

Berkeley, Calif. — UC Berkeley’s Haas School of Business announced a new flexible online option for its top-ranked, part-time Evening & Weekend MBA Program. The new Flex option offers the same curriculum and faculty and the same Berkeley Haas MBA degree in a highly customized and flexible online and on-campus format. 

Students enrolled in the Flex option will take their core MBA courses online. After completing their first three semesters of the core curriculum, students can take their elective courses either in person on the Berkeley Haas campus or online.  

Applications for the Flex option will open on August 17 through the Evening & Weekend MBA Program (EWMBA). The first group of about 60 Flex students will enroll in July of 2022. 

The Flex option will be part of the Berkeley Haas Evening & Weekend MBA Program, which is ranked #2 among part-time MBA programs by U.S. News. The program typically takes three years to complete, with some students completing their degree in just 2.5 years. 

“Students in the Flex cohort can get a top-ranked Berkeley Haas MBA from anywhere, without the commute to campus every week,” said Dean Ann E. Harrison. “They will have flexibility in how they complete their MBA program. Yet they can also enjoy the in-person and campus experience, giving them the ability to access the extracurricular experiences Berkeley and Haas have to offer.” 

The Flex option is designed for high-achieving and ambitious professionals with five or more years of professional work experience who seek additional skills to advance in their careers or to change jobs. They will join a network of 41,000 Haas alumni around the world.

In the Flex option, 40% to 60% of the online core courses will be delivered synchronously to create a robust, cohort-based learning experience. The significant percentage of synchronous content ensures that Flex students have the same opportunity for discussion and feedback as students in on-campus courses. Students will be assigned to study teams that are carefully selected for diverse skills and backgrounds, ensuring that students learn as much from each other as they do in the classroom. 

Given the importance of community in our EWMBA program, the Flex option also includes five in-person events:

  • WE Launch, the required orientation over a long weekend (Friday through Sunday) in late July on the Berkeley Haas campus. 
  • Leadership Communication, a required course taught on the Berkeley Haas campus as a weekend immersion (Friday through Sunday) in the second half of the second semester. 
  • RE Launch, an optional weekend immersion on the Berkeley Haas campus in October of the third semester. 
  • Business Communications in Diverse Environments, a required weekend immersion (Friday through Sunday), taught typically at a resort site in Napa Valley on the Martin Luther King Jr. holiday weekend in January of the fourth semester. 
  • WE Lead, an optional weekend celebration and reflection on the MBA experience held in May of the graduation year. 

“In this fast-changing environment, our MBA experience provides professionals not only with a rigorous management education but also with an understanding of how innovation, inclusion, and sustainability will shape the future of business,” said Dean Harrison. “Our innovative courses will help prepare our students for what’s next, addressing a wide range of workplace challenges—from questioning the ethics of artificial intelligence to recognizing how unconscious bias impacts management decisions.”

In 2022, Haas will celebrate the 50th anniversary of its part-time MBA program. “We think the creation of this new Flex cohort reflects our commitment to innovation and UC Berkeley’s mission,” said Jamie Breen, Assistant Dean, MBA Programs for Working Professionals, who oversees the new Flex option.

As the second-oldest business school in the United States, Berkeley Haas has been questioning the status quo since its founding in 1898. It provides research, thought leadership, and talent development to lead the way to a more inclusive and sustainable future.

More at https://ewmba.haas.berkeley.edu/academics/flex

Media Contact:
Ute Frey, Executive Director of Communications
[email protected]
O: (510) 642-0342
M: (510) 301-9184

How Robinhood’s trading app spurs investors’ herding instincts: Q&A with Prof. Odean

|By Kathleen Pender
The Robinhood app displayed on a phone
Photo by: STRF/STAR MAX/IPx 2021

Last year, when Berkeley Haas finance professor Terrance Odean was researching why users of the popular trading app Robinhood tended to “herd” into a small number of stocks, he never imagined a situation like what unfolded last week with GameStop.

“It was like a supernova of herding events,” he said. 

Shares in the moribund video-game retailer soared more than 400% over three days when a mob of investors—many congregating on the Reddit chat room WallStreetBets—coordinated to buy the stock en masse. It fell 44% the next day as Robinhood and other brokerage firms temporarily curbed new purchases of GameStop. Although trading has been restored, the stock has been mostly down but remains volatile. Tens of billions of dollars of market value have been created and erased.

Odean had been examining how Robinhood’s easy-to-use technology drives investor behavior and share prices. The Menlo Park company, founded in 2013, has built an enormous following, especially among young investors. It was “the first brokerage to offer commission-free trading on a convenient, simple, and engaging mobile app,” Odean wrote in a working paper he co-authored with three other finance professors. 

Making trading fun

The Robinhood app makes investing fun and—critics say—addictive. New members get a free share of stock after they scratch off the image of a lottery ticket, and when they reach certain milestones, digital confetti rains down on their screen. Robinhood users can begin trading as soon as they open an account.

“Half of Robinhood users are first-time investors, who are unlikely to have developed their own clear criteria for buying a stock,” the paper says. “The app prominently displays lists of stocks in an environment relatively free of complex information. For example … Robinhood only provides five charting indicators, while TD Ameritrade provides 489.”

The app focuses attention on Robinhood’s 100 “Most Popular stocks,” and a narrower “Top Mover” list that shows which 20 stocks, throughout the day, have the biggest positive or negative percentage changes.

Using Robintrack, a database of the most popular stocks among Robinhood users from May 2018 until August 2020, the researchers compared trading by its users to other retail investors. They also looked at trading in “attention-grabbing” stocks on three days when Robinhood system outages prevented its users from trading. 

They concluded that the simplicity of Robinhood’s app, combined with its users’ inexperience, made them more likely to herd, or pile into a smaller set of stocks, than other retail investors. 

Short sellers took note

They also looked at what happened to a stock’s price when it was subject to a herding event or “extreme herding” event, the latter being days when the number of Robinhood users who own a stock grew by 1,000 users and 50% from the previous day. These stocks posted abnormally large gains on the day of herding—averaging 14% for a regular herding event and 42% for an extreme herding event. The next day, however, returns turned “significantly negative” and were still down—5% and 9%, respectively—after 20 days.

“While some Robinhood users undoubtedly made money, in our analysis, a greater number of them lost money,” Odean said.

The team also documented a “marked increase in short selling for stocks involved in Robinhood herding events,” a sign that some investors have been exploiting these “predictably negative returns” by placing bets that Robinhood favorites will fall. The paper’s co-authors are  Brad Barber of UC Davis, Chris Schwarz of UC Irvine and Xing Huang of Washington University in St. Louis.

We asked Odean about Robinhood, GameStop and lessons to be learned from recent events.

Q: Did you ever dream there would be a herding event like GameStop?

A: It would be lovely to say I saw it coming, but no. What we are seeing with Robinhood is herding similar to what’s been documented in other situations, but previously the magnitudes have been much lower. We saw herding  in the 1970s and 1980s, when people on Monday would buy stocks mentioned Friday evening on Louis Rukeyser’s Wall Street Week, a public-television show. Now what you have is a lot more investors having their attention funneled into what is often a small set of illiquid stocks and buying at the same time.

What’s surprising about GameStop was the extent to which people were writing (primarily on the Reddit chatroom WallStreetBets) about how we will all consciously do the same thing at the same time and thus possibly affect market prices. That aspect of the GameStop fiasco is not in our paper. 

Is what you just described illegal?

I’m not an attorney but my understanding is, if two hedge funds started sending emails to each other saying if we both buy these stocks in large numbers on Tuesday, that will drive the price through the roof—that would probably be illegal. 

I’m not sure what will happen with GameStop, but it’s a lot harder to make a case against millions of people spending small amounts of money than against a small number of sophisticated investors doing this with a lot of money.

I’m not sure what will happen with GameStop, but it’s a lot harder to make a case against millions of people spending small amounts of money than against a small number of sophisticated investors doing this with a lot of money.

Has Robinhood made investing too simple?

It has changed people’s behavior by making it simple. Robinhood’s mission statement is to democratize investing for all. Jack Bogle (founder of Vanguard Group) did that years ago. You can buy a Vanguard index fund, pay $4 a year for every $10,000 you have invested and have a well diversified, long-term investment in the market and the U.S. economy. That’s democratization. What Robinhood has done is make it easy to trade.

How does Robinhood make money?

Hand over fist. They sell their customer’s orders to market makers. If you want to sell, the market makers buy from you, and vice versa. When market makers take the other side of a trade, they face asymmetric information risk—the risk that they are trading with someone who knows more than they do. Market makers seem to think that when they trade with someone from Robinhood, they are not taking that risk. They think, if I always take the opposite side of the trade from the side Robinhood is on, I will make so much money I can pay Robinhood. 

This is called “payment for order flow,” and it’s not new. Other retail brokerage firms also do it. 

(In December 2020, the Securities and Exchange Commission charged Robinhood with failing to properly disclose its payments for order flow to customers and failing to seek the best terms for their trades. Robinhood paid $65 million to settle the changes without admitting or denying guilt.)

Should regulators outlaw this practice?

It’s complicated. Without payment for order flow, there won’t be commission-free trading. My concern is that investors are only aware of costs that are direct and explicit. Most investors are aware of commissions, but not payment for order flow. If investors mistakenly believe that zero commissions means free trading, they are likely to trade more actively and more speculatively. I believe that we should get rid of payment for order flow, but one has to be careful about the unintended consequences of well-intended regulations.

What is the most important lesson to take away from this GameStop event?

Retail investors whose trades are highly correlated—through forums such as WallStreetBets or other means—have more market power than many people on Wall Street expected.

Retail investors whose trades are highly correlated—through forums such as WallStreetBets or other means—have more market power than many people on Wall Street expected.

Why did Robinhood temporarily halt new purchases in Gamestock, AMC and other stocks subject to extreme volatility?

Depository Trust and Clearing Corporation (the clearing house for Robinhood’s trades) required Robinhood to put up more capital to ensure that Robinhood would make good on the trades it placed for its clients. Brokerages are required to use their own money as collateral while they wait for trades to clear. Robinhood’s clearing house increased its capital requirement because of the surge in orders in GameStop and some other stocks and because these stocks became hugely volatile. Robinhood reopened trading after it raised $3.4 billion in additional capital.

Traders allegedly targeted companies like GameStop because a large percentage of their shares had been sold short by hedge funds and others. This means the short sellers borrowed GameStop shares and sold them, hoping to buy them back later at a lower price and pocket the difference. When GameStop shares skyrocketed, hedge funds suffered massive losses when they had to buy the shares at higher prices, which put even more upward pressure on GameStop shares. Some traders are portraying short sellers as the “bad guys” and Robinhood traders as “good guys.” Are there really any good guys and bad guys here?

Financial economists believe that short selling plays a useful role in markets by enabling investors with negative information or opinions about a stock to influence prices and thus keep prices from being set only by investors with optimistic views. Short sellers do, however, sometimes behave badly by promoting negative rumors about companies after they’ve established their short positions. I have not read that this was a major problem with GameStop. I would say that people who intentionally manipulate stock prices qualify as bad guys. And Jack Bogle—who tried to make investing less expensive and safer—was a good guy.