'Nota Bene' lecture gives students and their families strategic challenge
Professor David Besanko presents rigorous case study, praises Class of 2007 for its intelligence and philanthropyBy Adrienne Murrill
6/18/2007 - Although they had received their final grades, graduating Kellogg School students had one final opportunity to attend a special class before Convocation - and this time, their family and friends joined them.
As part of Graduation Week, David Besanko, the Alvin J. Huss Distinguished Professor of Management and Strategy, delivered the third and final "Nota Bene" lecture for the year. Designed to combine academic rigor with business relevance, this series offers the graduating class real-world insights they can carry with them as they return to the work force. The lectures, introduced in 2004, are especially valuable to second-year students who, because of scheduling challenges, did not have the opportunity to attend classes with the presenting professors.
Senior Associate Dean and IBM Distinguished Professor of Operations Management Sunil Chopra introduced Besanko to the crowd gathered in Owen L. Coon Forum on June 15. Chopra described his colleague as a "top researcher," "well accomplished" and "very highly regarded in his field," adding that Besanko has made significant contributions to the Kellogg community. These include co-authoring The Economics of Strategy, a text that defines the way strategy is taught at business schools today. Besanko also is recognized for his ability to reveal how complex research concepts are applied in practical settings.
It was Besanko's expert knowledge of strategy that he applied during his presentation, titled, "Thinking through Competitive Situations: A Case Study for Graduates and Guests." Because "nota bene" means to "note well," Besanko stated that his goal was to structure a discussion of noteworthy topics, ones that are accessible and enjoyable. These included insights from game theory and auction theory applicable in competitive situations. Besanko had asked the graduates and their guests to study the case prior to the session, approximating the experience of some Kellogg classes.
"For just about every subject, there are really only two [economic points] you need to know," he said. The first is that incentives matter: An individual will behave in a manner consistent with his defined self-interest. The second point is to beware of unintended consequences.
Game theory, while not providing specific answers, Besanko said, is the art and science of anticipating incentives. Using several examples, he showed the audience that "the pursuit of self interest doesn't necessarily guide us to an outcome that maximizes the collective well being of the players in the game. Individual rationality doesn't necessarily imply group rationality."
As both graduates and their friends and family participated in the class discussion and case study, Besanko noted that game theory can help structure thinking in unpredictable competitive situations, such as the one in the case, and lead people to make educated decisions.
"My firm belief is that the Kellogg graduates here have been armed with a whole set of tools that allow you to supplement your gut feelings," Besanko said. At the same time, he added, the Kellogg experience has helped students refine their intuitive and analytical prowess.
Besanko concluded his class by noting that graduation is a bittersweet time: "You're glad to move on, satisfied that you survived, but you're also saying goodbye to your friends, professors, the routines you've gotten into," he said. "My colleagues and I will miss you, and we want to let you know you've left behind your mark in a lot of ways" - including through student government initiatives, academic conferences and dozens of student-driven clubs that help define the school's culture. In addition, Besanko praised the Class of 2007 for its "remarkable generosity" resulting in a class gift of $1 million. He also thanked students for their intellectual rigor and curiosity and their feedback.
"In those ways, you have helped us improve our courses and make the academic experience a better one," said Besanko. "It is for that legacy that I and my colleagues are most grateful."
The lecture was followed by a luncheon for the graduates and their guests in the James L. Allen Center.