MANAGERIAL ECONOMICS & DECISION SCIENCES
Emeritus Professor
Stanley Reiter is Professor Emeritus of Managerial Economics & Decision Sciences, Economics, and Mathematics. He is one of the pioneers in the application of mathematical methods to the study of operations and a leader in the field of mechanism design. For his contributions he was elected a Fellow of the Econometric Society (1970), the American Association for the Advancement of Science (1983), and the American Academy of Arts and Sciences (1996).
During his tenure at the school, he helped found and shape the Department of Managerial Economics & Decision Sciences. In 1971, he founded the Center for Mathematical Studies in Economics and Management Science, which became a hotbed for research in economic theory and operations research.
Professor Reiter is the author of four books and dozens of peer reviewed articles. His latest book is Designing Economic Mechanisms (Cambridge University Press, 2006), co-authored with long time collaborator Leo Hurwicz.
Prior to his appointment at Northwestern, he served as professor of economics and mathematics at Purdue University (1954-1967) and worked in the Cowles Commission for Research in Economics (1948-1950). He received his PhD in economics from the University of Chicago.
In 2002, to honor Professor Reiter's commitment to research excellence, Kellogg established the Stanley Reiter Best Paper Award, bestowed upon a member of the faculty who has published a paper deemed "best" over the preceding four years. While Professor Reiter retired in 2007, he remains an active scholar.
An individual's preferences are assumed to be malleable and may be influenced by the preferences of others. Mutual interaction among individuals whose preferences are interdependent powers a dynamic process in which preference profiles evolve over time. Two formulations of the dynamic process are presented. One is an abstract model in which the iteration of a mapping from profiles to profiles defines a discrete time dynamic process; the other is a linear discrete time process specified in more detail. Examples motivate the model and illustrate its application. Conditions are given for the existence of a stable preference profile - a rest point of the dynamic process. A stable profile is naturally associated with a division, not in general unique, of the set of agents into subgroups with property that preference interdependencies within a subgroup are "stronger" than those across subgroups. The conventional case in which each agent's preference relation is exogenously given is, in this model, the special case where each subgroup consists of just one agent.
A transversal generated by a system of distinct representatives (SDR) for a collection of sets consists of an element from each set (its representative) such that the representative uniquely identifies the set it belongs to. Theorem 1 gives a necessary and sufficient condition that an arbitrary collection, finite or infinite, of sets, finite or infinite, have an SDR. The proof is direct, short. A Corollary to Theorem 1 shows explicitly the application to matching problems. In the context of designing decentralized economic mechanisms, it turned out to be important to know when one can construct an SDR for a collection of sets that cover the parameter space characterizing a finite number of economic agents. The condition of Theorem 1 is readily verifible in that economic context. Theorems 2-5 give different characterizations of situations in which the collection of sets is a partition. This is of interest because partitions have special properties of informational efficiency.
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