Sandeep Baliga
Sandeep Baliga

John L. and Helen Kellogg Professor of Managerial Economics & Decision Sciences

Print Overview
Sandeep Baliga is a Professor of Managerial Economics and Decision Sciences in the MEDS Department at the Kellogg School of Management, Northwestern University. Professor Baliga uses game theory and the theory of incentives to study fundamental issues in economics and political science.
He has studied how power and authority should be delegated within organizations to incentivize effort and innovation. He is currently studying the make or buy decision: how to the costs of haggling and incentives to rent-seek determine when an activity should be performed within a firm and when should it be subcontracted out?
In political science, Professor Baliga has studied the strategic logic of terrorism, whether democracies are less likely to go to war than other regime types, when communication can help reduce conflict, and the impact of strategic ambiguity of weapons stockpiles on arms proliferation. He is currently studying how the strategic nature of conflict changes with the technology of war and how the the logic of deterrence changes when there is an attribution problem as in cyberattacks.
Professor Baliga read Economics at St. John's College, Cambridge University and received his PhD in Economics from Harvard University. He has been on sabbatical at the Institute of Advanced Study in Princeton, Boston University, MIT and, most recently, Harvard. He was a Fulbright Scholar and an invited Fellow at the Center for Advanced Studies in the Behavioral Sciences at Stanford University.

Professor Baliga teaches Managerial Economics, Competitive Strategy and Industrial Structure, and Leadership and Crisis Management at the MBA level and "Conflict and Cooperation" at the PhD level.
Baliga was the Managing Editor of the Berkeley Electronic Press Journals in Theoretical Economics and Associate Editor of the European Economic Review. He has published in top journals including the American Economic Review, Journal of Economic Theory, Journal of Political Economy, RAND Journal of Economics, Review of Economic Studies and the Review of Financial Studies.

He blogs at Cheap Talk and is the co-creator of Purple Pricing, an innovative auction method that is being used by Northwestern University to sell football and basketball tickets. He has started a consulting company with two partners to commercialize these ideas. In his spare time, Professor Baliga likes going to concerts and the theatre. But in practice he is fully employed driving his son to hockey games.

Areas of Expertise
Contract Theory
Game Theory
International Economics
Mechanism Design

Print Vita
PhD, 1993, Economics, Harvard University
BA, 1988, Cambridge University, Double First Class Honors

Academic Positions
Visiting Associate Professor, Economics, Boston University and M.I.T., 2009-2010
Visiting Professor, Economics, Harvard University, 2015-2016
Professor, Kellogg School of Management, Northwestern University-present
Member, Institute for Advanced Study, Princeton University, 2000-2001
Berry-Ramsey Junior Research Fellow, King's College, Cambridge University, 1993-1997

Honors and Awards
Excellence in Refereeing Award, American Economic Review
Excellence in Refereeing, American Economic Review, 2014
Google Research Award, Google, 2014-2016
Excellence in Refereeing, The American Economic Review, 2013

Editorial Positions
Editor, Berkeley Electronic Press Journals in Theoretical Economics, 2011-2013
Associate Editor, European Economic Review, 2003-2009

Print Research
Research Interests

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

Baliga, Sandeep and Jeffrey Ely. 2016. Torture and the Commitment Problem. Review of Economic Studies. 83: 1406-1439.
Baliga, Sandeep, Eran Hanany and Peter Klibanoff. 2013. Polarization and Ambiguity. American Economic Review. 103(7): 3071-83.
Baliga, Sandeep and Tomas Sjostrom. 2013. Bargaining and War: A Review of Some Formal Models. Korean Economic Review. 29(2): 233-266.
Baliga, Sandeep and Tomas Sjostrom. 2012. The Strategy of Manipulating Conflict. 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.
Baliga, Sandeep and Tomas Sjostrom. 2009. Contracting with Third Parties. American Economic Journal: Microeconomics. 1(1): 75-100.
Baliga, Sandeep and Tomas Sjostrom. 2008. Strategic Ambiguity and Arms Proliferation. Journal of Political Economy. 116(6): 1023-1058.
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. 2004. Arms Races and Negotiations. Review of Economic Studies. 71(2): 351-369.
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 Rakesh Vohra. 2003. Market Research and Market Design. B.E. Journal of Theoretical Economics. 3(1)
Baliga, Sandeep and Stephen Morris. 2001. Coordination, Spillovers and Cheap-Talk. Journal of Economic Theory. 105(2): 450-468.
Baliga, Sandeep. 2002. The Not-So-Secret Agent: Professional Monitors, Hierarchies and Implementation. Review of Economic Design. 7(1): 17-26.
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 Roberto Serrano. 2001. Multilateral Negotiations with Private Side-Deals: A Multiplicity Example. Economics Bulletin. 3(1): 1-7.
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. Monitoring and Collusion with "Soft" Information. Journal of Law, Economics, & Organization. 15(2): 434-440.
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 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, Sandeep and Tomas Sjostrom. 2009. Conflict Games with Payoff Uncertainty.
Baliga, Sandeep and Tomas Sjostrom. 2009. Reputation and Conflict.
Baliga, Sandeep and Tomas Sjostrom. 2015. Coordination, Rent-Seeking and Control.
Baliga, Sandeep and Tomas Sjostrom. 2014. The Strategy of Conflict and the Technology of War.
Baliga, Sandeep and Roberto Serrano. 1998. Negotiations with Side-Deals.
Book Chapters
Baliga, Sandeep and Tomas Sjostrom. Forthcoming. "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. 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 Tomas Sjostrom. Forthcoming. "Durable Cheap Talk Equilibria." In Communication Games, edited by Richard Harbaugh, vol. 15, Holland: Elsevier.
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.
Al-Najjar, NabilSandeep Baliga and Chris Forman. 2004. Sugar Daddy: Quotas and the U.S. Government. Case 5-204-255 (KEL001).
Al-Najjar, NabilSandeep Baliga and Chris Forman. 2004. Steel Wars: A Battle for the Future of American Steel. Case 5-204-256 (KEL002).

Print Teaching
Teaching Interests
Competitive strategy and industrial structure; crisis management; international relations
Full-Time / Evening & Weekend MBA
Leadership and Crisis Management (KPPI-440-5)
This course was formerly known as KPPI 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. Spring 2017 Chicago Campus Section 71 will meet on the following dates: Fri 04/07/2017 6:00 PM - 9:00 PM Sat 04/08/2017 9:00 AM - 4:00 PM Fri 04/21/2017 6:00 PM - 9:00 PM Sat 04/22/2017 9:00 AM - 12:00 PM

Political Economy II: Conflict and Cooperation (MECS-540-2)
This course will offer a mainly 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 incentive-compatible cooperation (normative analysis). Specific topics include: guns vs butter models of conflict and arms races caused by greed, conflict created by mutual uncertainty of motives, democratic peace, terrorism, slippery slope arguments for pre-emption and wars of attrition.

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.