Nabil Al-Najjar
Nabil Al-Najjar

MANAGERIAL ECONOMICS & DECISION SCIENCES
John L. and Helen Kellogg Professor of Managerial Economics & Decision Sciences

Print Overview

Research Page

Nabil Al-Najjar is a Professor of Managerial Economics and Decision Sciences and chair of the MEDS department. He serves on the editorial boards of the Journal of Mathematical Economics and the International Journal of Game Theory.

Al-Najjar's research focuses on the development of learning-based models of decision making in markets, games and contracts. His papers have been published in top scholarly journals such the Journal of Economic Theory, Games and Economic Behavior, and the RAND Journal of Economics, among others.

For his excellence in teaching, Al-Najjar has twice been the recipient of the school's Sidney J. Levy Award, in 1996-97 for his class in microeconomics, and 2006-07 for his class in competitive strategy. He has received the Chairs' Core Teaching Award for his class in microeconomics.

Al-Najjar received his PhD in Economics from the University of Minnesota. Prior to joining the Kellogg faculty in 1995, he was a faculty member at the University of Quebec in Montreal.



Areas of Expertise
Behavioral Economics
Game Theory

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Print Vita
Education
PhD, 1989, Economics, University of Minnesota
MA, 1982, Economics, University of Ottawa
BA, 1979, Economics, Al-Mustansiriah University

Academic Positions
Professor, Managerial Economics & Decision Sciences, Kellogg School of Management, Northwestern University, 1995-present
Professor, University of Quebec, 1989-1995

Honors and Awards
Certificate of Impact, Northwestern University, Decision Making and Modeling, 2012, 2013

Editorial Positions
Editorial Board, International Journal of Game Theory, 2003-2009
Editorial Board, Journal of Mathematical Economics, 1996-2010

Print Research
Research Interests
Decision theory, learning, game theory

Articles
Al-Najjar, Nabil and Eran Shmaya. 2015. Uncertainty and Disagreement in Equilibrium Models. Journal of Political Economy. 123: 778-808.
Al-Najjar, Nabil and Jonathan Lewis Weinstein. 2015. A Bayesian Model of Knightian Uncertainty. Theory and Decision. 78: 1-22.
Al-Najjar, Nabil. 2015. A Bayesian Framework for the Precautionary Principle. Journal of Legal Studies. 44: 337-365.
Al-Najjar, Nabil and Luciano Pomatto. 2015. Choice under Aggregate Uncertainty. Theory and Decision. 80: 187-209.
Al-Najjar, Nabil, Luciano Pomatto and Alvaro Sandroni. 2014. Merging and testing opinions. Annals of Statistics. 42(3): 1003-1028.
Al-Najjar, Nabil and Luciano de Castro. 2014. Parametric Representation of Preferences. Journal of Economic Theory. 150: 642-67-86.
Al-Najjar, Nabil and Mallesh M. Pai. 2014. Coarse Decision-Making and Overfitting. Journal of Economic Theory. 150: 467-486.
Al-Najjar, Nabil, Luciano Pomatto and Alvaro Sandroni. 2014. Claim Validation. American Economic Review. 104(11): 3725-3736.
Al-Najjar, Nabil and Alvaro Sandroni. 2013. A Difficulty in the Testing of Strategic Experts. Mathematical Social Sciences. 65(1): 5-9.
Al-Najjar, NabilAlvaro Sandroni, Rann Smorodinsky and Jonathan Lewis Weinstein. 2010. Testing Theories with Learnable and Predictive Representations. Journal of Economic Theory. 145(6): 2203–2217.
Al-Najjar, Nabil. 2009. Decision Makers as Statisticians: Diversity, Ambiguity and Learning. Econometrica. 77: 1371-1401.
Al-Najjar, Nabil and Jonathan Lewis Weinstein. 2009. The Ambiguity Aversion Literature: A Critical Assessment. Economics and Philosophy. 25: 249-284.
Al-Najjar, Nabil. 2008. Large Games and the Law of Large Numbers. Games and Economic Behavior. 64: 1-34.
Al-Najjar, NabilSandeep Baliga and David Besanko. 2008. Market Forces and Behavioral Biases: Cost-Misallocation and Irrational Pricing. RAND Journal of Economics. 39(1): 214-237.
Al-Najjar, Nabil and Jonathan Lewis Weinstein. 2008. Comparative Testing of Experts. Econometrica. 76(3): 541-559.
Al-Najjar, Nabil. 2007. Finitely Additive Representation of Lp Spaces. Journal of Mathematical Analysis and Applications. 330(12): 891-899.
Al-Najjar, Nabil and Rann Smorodinsky. 2005. The Efficiency of Competitive Mechanisms under Private Information. Journal of Economic Theory. 137(1): 383-403.
Al-Najjar, Nabil, Luca Anderlini and Leonardo Felli. 2006. Undescribable Events. Review of Economic Studies. 73(4): 849-868.
Al-Najjar, Nabil. 2004. Aggregation and the Law of Large Numbers in Large Economies. Games and Economic Behavior. 47(1): 1-35.
Al-Najjar, Nabil, Ramon Casadesus-Masanell and Emre Ozdenoren. 2003. Probabilistic Representation of Complexity. Journal of Economic Theory. 111(1): 49-87.
Al-Najjar, Nabil and Rann Smorodinsky. 2001. Large Non-Anonymous Repeated Games. Games and Economic Behavior. 37(1): 26-39.
Al-Najjar, Nabil. 2001. A Reputational Model of Authority. Journal of Economic Behavior & Organization. 46(2): 165-191.
Al-Najjar, Nabil and Rann Smorodinsky. 2000. Pivotal Players and the Characterization of Influence. Journal of Economic Theory. 92(2): 318-342.
Al-Najjar, Nabil and Rann Smorodinsky. 2000. Provision of Public Goods with Bounded Project Costs. Economics Letters. 67(3): 297-301.
Al-Najjar, Nabil. 1999. On the Robustness of Factor Structures to Asset Repackaging. Journal of Mathematical Economics. 31(3): 309-320.
Al-Najjar, Nabil. 1998. Factor Analysis and Arbitrage Pricing in Large Asset Economies. Journal of Economic Theory. 78(2): 231-262.
Al-Najjar, Nabil. 1997. Incentive Contracts in Two-Sided Moral Hazards with Multiple Agents. Journal of Economic Theory. 74(1): 174-195.
Al-Najjar, Nabil. 1996. Strategically Stable Equilibria in Games with Infinitely Many Pure Strategies. Mathematical Social Sciences. 31(1): 50.
Al-Najjar, Nabil. 1995. Decomposition and Characterization of Risk with a Continuum of Random Variables: Corrigendum. Econometrica. 67(4): 919-920.
Al-Najjar, Nabil. 1995. Incomplete Contracts and the Governance of Complex Contractual Relationships. American Economic Review, Papers & Proceedings. 85(2): 432-436.
Al-Najjar, Nabil. 1995. Reputation, Product Quality and Warranties. Journal of Economics & Management Strategy. 3(4): 605-637.
Al-Najjar, Nabil. 1995. A Theory of Forward Induction in Finitely Repeated Games. Theory and Decision. 38(2): 173-193.
Al-Najjar, Nabil. 1993. Non-Transitive Smooth Preferences. Journal of Economic Theory. 60(1): 14-41.
Working Papers
Al-Najjar, Nabil and Eran Shmaya. 2016. Recrusive Utility and Structural Uncertainty.
Al-Najjar, Nabil and Luciano Pomatto. 2014. Aggregative Utility in Large Populations.
Al-Najjar, Nabil. 2014. This Time is Different.
Al-Najjar, Nabil and Eran Shmaya. 2013. Learning and Long-run Fundamentals in Stationary Environments.
Al-Najjar, Nabil and Luciano de Castro. 2013. Ergodic Theory without Probability.
Al-Najjar, Nabil and Luciano de Castro. 2009. A Subjective Foundation of Objective Probabilities.
Al-Najjar, Nabil and Ramon Casadesus-Masanell. 2004. Descretion in Agency Contracts.
Al-Najjar, Nabil and Chris Forman. 2000. Reciprocal Exchange in Agency.
Al-Najjar, Nabil. 2000. Complexity as a Barrier to Competitive Imitation.
Book Chapters
Al-Najjar, Nabil, Luca Anderlini and Leonardo Felli. 2016. "Incomplete Contracts, Mechanism Design and Complexity." In The Impact of Incomplete Contracts on Economics, edited by P. Aghion, M. Dewatripont, P. Legros, L. Zingales, Oxford: Oxford University Press.
de Castro, Luciano and Nabil Al-Najjar. 2011. "Subjective Probability." In Wiley's Encyclopedia of Operations Research and Management Science, edited by James Cochran et al., Hoboken, NJ: John Wiley & Sons.
Cases
Al-Najjar, NabilSandeep Baliga and Chris Forman. 2004. Steel Wars: A Battle for the Future of American Steel. Case 5-204-256 (KEL002).
Al-Najjar, NabilDavid Besanko and Amit Nag. 2004. California Power Crisis. Case 5-403-759 (KEL004).
Al-Najjar, Nabil and Simone Galperti. 2010. Argentina Currency Peg and Fiscal Reforms (A). Case 5-110-004(A) (KEL569).
Al-Najjar, Nabil and Ali Malik. 2005. U.S. Credit Card Industry. Case 5-205-256 (KEL152).
Al-Najjar, NabilSandeep Baliga and Chris Forman. 2004. Sugar Daddy: Quotas and the U.S. Government. Case 5-204-255 (KEL001).
Al-Najjar, Nabil and Neil Pardasani. 2006. U.S. Automotive Retailing: 1995–2002 (B). Case 5-106-003(B) (KEL201).
Al-Najjar, Nabil, Ichiro Aoyagi, Guy Goldstein, Ted Korupp, Bin Liu and Suchet Singh. 2006. Boeing and Airbus: Competitive Strategy in the Very Large Aircraft Market. Case 5-404-759 (KEL022).
Al-Najjar, Nabil and Neil Pardasani. 2006. U.S. Automotive Retailing: 1995–2002 (A). Case 5-106-003(A) (KEL200).
Al-Najjar, Nabil and David Besanko. 2004. Motorola in the Wireless Handset Market. Case 5-204-261 (KEL023).
Al-Najjar, NabilDavid Besanko and Robert Uchoa. 2004. Credit Solicitations as Market Experiments in the U.S. Credit Card Industry. Case 5-204-252 (KEL005).
Al-Najjar, Nabil and Neil Pardasani. 2006. U.S. Automotive Retailing: 1995–2002 (C). Case 5-106-003(C) (KEL202).
Al-Najjar, Nabil, Dershan Desai and Steven Hallaway. 2006. Satellite Radio: An Industry Case Study. Case 5-206-255 (KEL203).

 
Print Teaching
Teaching Interests
Microeconomics, macroeconomics, competitive strategy, commodity industries, decision theory
Full-Time / Evening & Weekend MBA
Decision Making and Modeling (DECS-450-0)
This course introduces fundamental concepts and modeling tools for decision making under uncertainty. The pedagogical approach combines business cases, conceptual frameworks of probability and risk analysis, and spreadsheet modeling of managerial decision problems. The course will also provide you with training in state-of-the-art Palisade's DecisionTools Suite to perform and interpret Monte Carlo simulation and decision tree models. Among the concepts discussed in depth are the value of information, option value, selection bias, herd behavior, risk aversion, and the “flaw of averages.'' The concepts and tools are illustrated using business applications in the areas of economics, strategy, operations, and finance.

For more information about the course content, recent syllabus, and TCEs, please click here.



Competitive Strategy and Industrial Structure (MECN-441-0)
The course studies the determinants nature of competitive strategy in a variety of industry structures. The course considers how the structure of a firm's industry affects its strategic choices and performance. Topics include the dynamic aspects of pricing, entry and predation in concentrated industries, and product differentiation, product proliferation and innovation as competitive strategies.

Economic Theory I: Decision Theory (MECS-550-1)
This is a course on decision theory and focuses on formal theories of individual decision making. Decision making under risk and uncertainty is emphasized.  The course briefly explores utility theory under certainty and the notion of preferences and their representation.  Then is studies in detail the classic expected utility theories of decision under risk and uncertainty: von Neumann and Morgenstern, Anscombe and Aumann, and Savage.  This forms the basic grounding in the subject.  From here we explore a selection of areas that expand on the classical work in various directions and are closer to the current research frontier.  These areas may include: (1) Ellsberg's paradox, models of ambiguity and ambiguity attitude; (2) dynamics -- preferences over time, dynamic consistency, updating, time and risk; (3) probabilistic sophistication; (4) risk measures; (5) models of unforeseen contingencies/preference for/against flexibility; (6) incomplete preferences; (7) prospect theory; (8) stochastic choice.  The selection of these or other specific areas we cover may vary depending on time and the interests of members of the class and the instructor.

Executive MBA
Analytical Approach to Uncertainty (DECSX-433-0)
Analytical Approach to Uncertainty introduces elementary probability theory as a tool for modeling uncertainty in business, with illustrations from decision theory and statistics.

Statistical Decision Analysis (DECSX-434-0)
Statistical Decision Analysis explores the use of sample data for estimating,predicting, forecasting and making business decisions.

Biases, Forecasts, and Deep Uncertainty (DECSX-435-0)
All critical decisions in business involve bets on future events about which there is no reliable past data or consensus about their likelihoods. Judgment in these situations of deep uncertainty tends to be clouded by behavioral biases that lead to frequent, often disastrous, forecast failures. This course provides frameworks to identify persistent psychological biases that underlie these failures and shows how tools of cognitive psychology and probability can effectively mitigate them. The course will cover cases on strategic business decisions in contexts that include: • Mergers and acquisitions • Capacity expansions in commodity industries • Incumbents’ failure to anticipate disruptive changes • Failures to anticipate tail events and network dynamics.
We use these cases to identify of biases like over-optimism, herd behavior, narrow framing, escalation of commitment, winner’s curse, failure to appreciate tail risks, and the sunk cost fallacy. The course’s frameworks will help you anticipate these biases and will provide tools to improve your decision making process. These tools include pre-mortem analysis, scenario analysis, decision trees, models of wisdom of the crowd and informational cascades.

Competitive Analysis of Commodity Industries (MECNX-442-0)
Competitive Analysis of Commodity Industries introduces students to state-of-the-art models for the analysis of commodity markets. These include powerful frameworks for forecasting price trends, incorporating real options and herd behaviors in pricing models, and economic drivers of public policies and regulations.

Executive Education
Business for Scientists and Engineers

For practitioners and academics in science and engineering, this highly focused program provides a solid grounding in business concepts, industry-specific tools and practical frameworks for developing the business acumen you need to advance your life’s work.


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