Sandeep Baliga
Sandeep Baliga

MANAGERIAL ECONOMICS & DECISION SCIENCES
Professor of Managerial Economics & Decision Sciences

Print Overview

Professor Baliga joined the faculty at the Kellogg School of Management in 1997. Prior to joining Kellogg, he was a Research Fellow at King's College, Cambridge University. Professor Baliga's research interests include the theory of the firm, game theory, mechanism design and international relations.

His work in the theory of the firm elucidates how authority should be delegated within organizations. He shows that the agent whose effort most improves the productivity of other workers should be responsible for contracting with them, even if he cannot monitor other agents’ effort. He also studied the pathological effects of peer review on project investment and identified the repercussions of the "not invested here" effect.

Most recently, he has been studying how conflict can arise because a spiral of fear develops between adversaries. Baliga showed that communication is surprisingly useful in reducing fear and increasing cooperation. He has examined the impact of fear of conflict on domestic politics and the incentive to go to war. Another recent project shows how bluffing about weapons stockpiles can actually help to reduce arms proliferation.  

Baliga is the Managing Editor of the Berkeley Electronic Press Journals in Theoretical Economics. He was previously Associate Editor of the European Economic Review. He has published in top journals including the Journal of Economic Theory, Journal of Political Economy, RAND Journal of Economics, Review of Economic Studies and the Review of Financial Studies.



Areas of Expertise
Contract Theory
Game Theory
International Economics
Mechanism Design
Microeconomics
Print Vita
Education
PhD, 1993, Economics, Harvard University
BA, 1988, Cambridge University, Double First Class Honors

Academic Positions
Professor, Kellogg School of Management, Northwestern University, 2012-present
Associate Professor, Kellogg School of Management, Northwestern University, 2000-2012
Member, Institute for Advanced Study, Princeton University, 2000-2001
Assistant Professor, Kellogg School of Management, Northwestern University, 1997-2000
Berry-Ramsey Junior Research Fellow, King's College, Cambridge University, 1993-1997

Grants and Awards
Fellow, Center for Advanced Study in the Behavioral Sciences, Stanford University, 2011-2012
Professor Baliga was tapped to be a fellow at the Center for Advanced Studies in the Behavioral Sciences but he declined the honor
Excellence in Refereeing, The American Economic Review, one year

Editorial Positions
Editor, Berkeley Electronic Press Journals in Theoretical Economics, 2011-present
Associate Editor, European Economic Review, 2006-present
Editor, B.E. Press Journals in Theoretical Economics, 2011-2013
Co-Editor, Berkeley Electronic Press Journals in Theoretical Economics, 2007-2010
Associate Editor, B.E. Journal of Theoretical Economics, 2001-2007

Conference Presentations
Rationality and Conflict, 1/01/2009

 
Print Research
Research Interests
Game theory; mechanism design; contract theory; theory of the firm; game-theoretic approach to international relations

Articles
Baliga, Sandeep, Eran Hanany and Peter Klibanoff. Forthcoming. Polarization and Ambiguity. American Economic Review.
Baliga, Sandeep and Tomas Sjostrom. 2012. The Strategy of Manipulating Conflict. The American Economic Review. 106(2)
Baliga, Sandeep and Jeffrey Ely. 2011. Mnemonomics: The Sunk Cost Fallacy as a Memory Kludge. American Economic Journal: Microeconomics. 3: 35-67.
Baliga, Sandeep, David Lucca and Tomas Sjostrom. 2011. Domestic Political Survival and International Conflict: Is Democracy Good for Peace?. Review of Economic Studies. 78(2): 458-486.
Axelson, Ulf and Sandeep Baliga. 2009. Liquidity and Manipulation of Executive Compensation Schemes. Review of Financial Studies. 22(10): 3907-3939.
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.
Baliga, Sandeep and Tomas Sjostrom. 2008. Strategic Ambiguity and Arms Proliferation. Journal of Political Economy. 116(6): 1023-1058.
Baliga, Sandeep and Tomas Sjostrom. 2009. Contracting with Third Parties. American Economic Journal: Microeconomics. 1(1): 75-100.
Baliga, Sandeep and Ben Polak. 2004. The Emergence and Persistence of German and Anglo-Saxon Financial Systems. Review of Financial Studies. 17(1): 129-163.
Baliga, Sandeep and Tomas Sjostrom. 2004. Arms Races and Negotiations. Review of Economic Studies. 71(2): 351-369.
Baliga, Sandeep and Rakesh Vohra. 2003. Market Research and Market Design. BE Journals in Theoretical Economics. 3(1)
Baliga, Sandeep. 2002. The Not-So-Secret Agent: Professional Monitors, Hierarchies and Implementation. Review of Economic Design. 7(1): 17-26.
Baliga, Sandeep and Stephen Morris. 2001. Coordination, Spillovers and Cheap-Talk. Journal of Economic Theory. 105(2): 450-468.
Baliga, Sandeep and Roberto Serrano. 2001. Multilateral Negotiations with Private Side-Deals: A Multiplicity Example. Economics Bulletin. 3(1): 1-7.
Baliga, Sandeep and Tomas Sjostrom. 2001. Optimal Design of Peer Review and Self-Assessment Schemes (former title "Not Invented Here"). RAND Journal of Economics. 32(1): 27-51.
Baliga, Sandeep and Robert Evans. 2000. Renegotiation in Repeated Games with Side-Payments. Games and Economic Behavior. 33(2): 159-176.
Baliga, Sandeep and Sandro Brusco. 2000. Collusion, Renegotiation and Implementation. Social Choice and Welfare. 17(1): 69-83.
Baliga, Sandeep. 1999. Implementation in Economic Environments with Incomplete Information: The Use of Multi-Stage Games. Games and Economic Behavior. 27(2): 173-183.
Baliga, Sandeep. 1999. Monitoring and Collusion with "Soft" Information. Journal of Law, Economics, & Organization. 15(2): 434-440.
Baliga, Sandeep and Tomas Sjostrom. 1999. Interactive Implementation. Games and Economic Behavior. 27(1): 38-63.
Baliga, Sandeep and Tomas Sjostrom. 1998. Decentralization and Collusion. Journal of Economic Theory. 83(2): 196-232.
Baliga, Sandeep, Luis Corchon and Tomas Sjostrom. 1997. The Theory of Implementation when the Planner is a Player. Journal of Economic Theory. 77(1): 15-33.
Baliga, Sandeep and Roberto Serrano. 1995. Multilateral Bargaining with Imperfect Information. Journal of Economic Theory. 67(2): 578-589.
Working Papers
Baliga, SandeepTimothy Feddersen and Ron Siegel. 2013. Early Voting.
Baliga, SandeepTimothy Feddersen and Chris Li. 2013. Strategic Pollsters and Turnout.
Baliga, Sandeep and Tomas Sjostrom. 2013. Is Democracy Good for Peace?.
Baliga, Sandeep and Alvaro Sandroni. 2013. The Moral Rhetoric of the Weak.
Baliga, Sandeep and Eric Maskin. 2013. The Coase Theorem Revisited.
Baliga, Sandeep and Tomas Sjostrom. 2013. Hobbesian Models of Conflict.
Baliga, Sandeep and Jeff Ely. 2013. Purple Pricing.
Baliga, Sandeep and Jeff Ely. 2013. Prisoner Dilemma.
Baliga, Sandeep and Tomas Sjostrom. 2012. Reputation and Conflict.
Baliga, Sandeep and Tomas Sjostrom. 2012. Conflict Games with Payoff Uncertainty.
Baliga, Sandeep and Tomas Sjostrom. 2008. The Logic of Mutual Fear: Escalation and Deterrence in Conflict.
Book Chapters
Baliga, Sandeep and Tomas Sjostrom. 2011. "The Hobbesian Trap." In Oxford Handbook of the Economics of Peace and Conflict, edited by Michelle Garfinkel and Stergios Skaperdas, Oxford: Oxford University Press.
Baliga, Sandeep and Tomas Sjostrom. Forthcoming. "Durable Cheap Talk Equilibria." In Communication Games, edited by Richard Harbaugh, vol. 15, Holland: Elsevier.
Baliga, Sandeep and Tomas Sjostrom. 2006. "Mechanism Design: Recent Developments." In The New Palgrave Dictionary of Economics, edited by L. Blume and S. Durlauf, vol. 2, London, UK: Palgrave Macmillan.
Baliga, Sandeep and Eric Maskin. 2003. "Mechanism Design for the Environment." In Handbook of Environmental Economics, edited by Kenneth Arrow and Michael Intriligator (series eds.), Karl-Goran Maler and Jeffrey Vincent (vol. eds.), vol. 1, Netherlands: Elsevier Science.
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, NabilSandeep Baliga and Chris Forman. 2004. Sugar Daddy: Quotas and the U.S. Government. Case 5-204-255 (KEL001).

 
Print Teaching
Teaching Interests
Competitive strategy and industrial structure; crisis management; international relations
Full-Time / Part-Time MBA
Leadership and Crisis Management (KPPI-440-A)

This course counts toward the following majors: Social Enterprise

Formerly SEEK-440-A

In recent decades corporations have increasingly become the dominant source for political and social change. Increased globalization and technological progress have further accelerated this process. Businesses are now held accountable by standards other than legal compliance or financial performance. Successful business leaders have recognized that these challenges are best mastered by a commitment to values-based management. However, simply "doing the right thing" is not enough. Rather, companies increasingly find themselves as targets of aggressive legal action, media coverage and social pressure. Organizations must be prepared to handle rapidly changing environments and anticipate potential threats. This requires a deep understanding of the strategic complexities in managing various stakeholders and constituencies. To confront students with these challenges in a realistic fashion, the class is structured around a rich set of challenging case studies and crisis simulation exercises.

Microeconomic Analysis (MECN-430-0)

This course counts toward the following majors: Managerial Economics.

Among the topics this core course addresses are economic analysis and optimal decisions, consumer choice and the demand for products, production functions and cost curves, market structures and strategic interactions, and pricing and non-price concepts. Cases and problems are used to understand economic tools and their potential for solving real-world problems.

Executive MBA
Economics of Competition (MECNX-441-0)
Economics of Competition prepares students to diagnose the determinants of an industry’s structure and formulate rational, competitive strategies for coping with that structure.

Doctoral
Conflict and Cooperation (MECS-473-0)
This course will offer a comprehensive theoretical treatment of conflict. Strategic interaction within and across nations involves conflict and cooperation. Disagreement between a country’s population and its leadership can cause internal conflict, oppression and terrorism. Disagreement between countries can lead to war, costly arms races and impede economic development. Conflict often arises even though there is some cooperative solution that would have satisfied all the relevant actors. We will study the fundamental causes of conflict (positive analysis) and possible solutions that create cooperation (normative analysis). Positive analyses will focus on conflict caused by payoff uncertainty or asymmetric information, the inability to commit to honor agreements, income inequality, fractionalization of the population into distinct and antagonistic groups and extremists who attempt to manipulate conflict to achieve their ends. This part of the course will cover topics such as the reciprocal fear of surprise attack, global games, wars of attrition, bargaining and coalition-formation. Normative analyses will focus on communication, mechanism design and institutions and their impact on cooperation. Communication of motives or confidence-building measures, such as allowing arms inspections, may diffuse tension. Or they may increase the chances of conflict by exposing the strength or weakness of a country’s arms capabilities. Asymmetric information may preclude implementation of cooperation even when transfers are available and it is possible to fully commit. Similarly, “moral hazard arising from a leader’s desire for political survival will affect the chances of conflict or cooperation. Different institutions have different commitment properties. For example, democratization gives the citizens a permanent voice in collective decision-making. This influences their incentives to revolt or accept the decisions of a leader. These issues apply equally across countries and can cause war or within a country and cause civil war. While the course is theoretical, we will offer stylized facts about war and civil war as motivation and a guide to interesting unexploited questions and puzzles. Unlike many topics in economics and political science, these issues are under-explored. We hope to generate interesting research questions