Leadership Spotlight

What makes people think they'll have more free time in the future than they have today? When do personal connections outweigh educational credentials in hiring? How can businesses use word-of-mouth to their advantage? Where's the best place to build a video store?

These are just some of the innovative questions explored by Wharton's nine new faculty members, who bring additional global diversity to the School, hailing from Iceland, Israel, Germany, Canada, Ukraine, Russia, and the United States.

Joining six Wharton departments in Fall 2006, these professors reinforce Wharton's links to the country's other leading universities and business schools, with graduate work at Yale, Harvard, Stanford, Princeton, Duke, NYU, and the University of Chicago.

Helping Consumers Make Better Decisions

"Why don't people realize that they will not have more time in the future than they have today?" That's the driving question behind a widely reported 2005 study co-authored by Gal Zauberman, an assistant professor at UNC-Chapel Hill who joins Wharton's Marketing Department this year as an associate professor.

In this paper, Zauberman and co-author John Lynch found that people consistently overestimate how much time—but not how much money—they will have in the future. This tendency, Zauberman told The New York Times last year, "can lead us to volunteer for trivial tasks, and then not have time to do the things that are really important to us."

Helping people make better decisions also focuses the work of Chris Lee, a new assistant professor in Operations and Information Management. With a Ph.D. in Computational and Mathematical Engineering from Stanford, he designs models of optimal dialysis treatment for patients with chronic kidney disease. His formulas balance a range of factors—including quality of life, treatment cost, demographics, pre-existing medical conditions, and transplant failure—to maximize both cost effectiveness for hospitals and treatment effectiveness for patients.

Helping Businesses Make Better Decisions

Other new faculty members research decision-making from the business side. Katja Seim, a new assistant professor in Business and Public Policy, studies the strategic impact of video store locations. A Stanford assistant professor who spent last year at Wharton as a visiting faculty member, Seim argues that, for companies with highly localized demand such as video stores, geographical differentiation becomes a form of product differentiation, as they use their locations to help shield themselves from local competition.

Shawndra Hill, who joins the Operations and Information Management Department with a background in Information Systems and Electrical Engineering, researches the value to companies of mining data on how consumers interact with each other—for example, in word-ofmouth or "buzz" marketing that the companies cannot directly control.

Hill argues that firms that collect explicit data on these interaction networks can both reduce costs (for instance, by identifying a current customer as one who defaulted in the past) and generate more revenue than they can with traditional methods of targeting customers.

Valery Yakubovich, an economic sociologist who will be an associate professor in Management after four years teaching at the University of Chicago Graduate School of Business, examines the importance of this kind of social network in the Russian labor market. Based on his study of hiring practices in the industrial city of Samara, he analyzes the relative weight of personal connections compared to such other factors as credentials, advertisements, and political or market forces.

New Models of Corporate Finance and Asset Pricing

The Finance department welcomes three new assistant professors to their first

teaching jobs, fresh from graduate work at Harvard, Princeton, and Duke. All three specialize in corporate finance and asset pricing.

Pavel Sabor, a graduate of Harvard and Yale, has worked on such topics as short-selling and stock mergers. He was also head and founder of the Mergers and Acquisitions department of Pliva, a Croatian pharmaceutical company with 7,000 employees.

Gustav Sigurdsson, an Icelandic citizen who joins Wharton after graduate work in Princeton's economics department, also specializes in corporate finance—for example, researching the most efficient use of auctions in reorganizing bankrupt firms.

Dana Kiku, a Ukraine citizen who graduated from Duke, has written on long-term asset allocation, investing risk, and the "value premium" in equity markets. She also has a master's degree in Applied Mathematics from the National Technical University of Ukraine.

In the Accounting Department, the work of new assistant professor Regina Moerman investigates pricing in the secondary loan market, focusing on such issues as trading spreads, debt pricing, and the impact of "information asymmetry"—a transaction in which one party (usually the seller) holds more information than the other.