That’s how two Wharton professors, Daniel Gottlieb and Kent Smetters, model their students in a recent paper that tries to explain why so many business schools have policies – typically adopted by student vote – that prevent students from disclosing their grades to employers. Seems reasonable!
We construct a model with students, schools, and employers. Students prefer larger postschool wages but dislike studying. Schools are heterogenous in their selectivity (reputation). Under disclosure, employers can observe both a student’s grades and the school’s selectivity; under non-disclosure, an employer can only observe the partial signal of the school’s selectivity.
That model leads to a bunch of equations (no charts, sorry) with conclusions that again seem pretty reasonable. The driving force for preferring a non-disclosure policy turns out to be that mean post-graduation pay has to be higher than median pay – and the authors think that this is likely at a selective school where the top students can be very valuable, but less likely for a less-selective school where everyone is clustered closer to average ability. If the average value of a Wharton student is higher than value of the average Wharton student, then making it hard for employers to figure out who is actually valuable will let everyone get paid for the optionality:
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And the feeling is mutual. Continue reading »
After he graduated from Columbia Business School last June, Adam Wyden probably had a bunch of offers to mull over from various employers. What he really wanted to do, though, was be a hedge fund manager. So he figured he’d just start his own shop, having the experience of trading stocks for his own account as Wharton undergrad (Class of ’06) and a summer internship with DE Shaw under his belt. Interested in getting a piece of the action? Continue reading »
Regular Dealbreaker readers know that we spend a lot of time around these parts having the CFA v. MBA debate (well, not me, but some of you, amongst yourselves, in the comments, losing your shit). Today brings a point in favor of the b-school track, courtesy of Wharton. Apparently a bit of disagreement has been brewing between a group of students and the administration, re: whether or not the future business leaders of the world should be allowed to skip class in order to go on a ski trip to Park City. The administration says no, they shouldn’t, because it reflects disrespect for academic commitments, is discouraging to the faculty, creates a divide among the students going Wharton brand if this sort of thing go out to a) the rest of the Penn campus and b) the outside world in general. Obviously, the students wanting so badly to go on this trip saw things a bit differently and a dialogue ensued. For those of you who, after reading the full back and forth after the jump, would challenge the assertion that this case reflects a point for the MBA track rather than the CFA, I would ask you to show me the CFA program where you’re afforded the opportunity and downtime to say and draft stuff like:
* “The trip in no way takes away from Wharton’s rigorous analytical MBA program”
* “I honestly can’t think of a more rigorous or more analytical MBA program than Wharton’s.”
* “I am told that seasoned Wharton professors typically earn $250K or more per year. It would be nice if anyone in the administration held professors accountable for teaching quality.”
* “How can it be hard to defend the Wharton brand on the Penn campus when the Wharton brand is far more prestigious? Penn should be defending itself to us!”
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So you can imagine The Black Swan author’s surprise to find out his b-school chum is an alleged insider trading specialist.
Nassim Nicholas Taleb, author of The Black Swan, got a shock when he opened the newspaper last weekend and saw a picture of an old classmate from Wharton business school at the University of Pennsylvania.
“He was an extremely likeable fellow, chubby, a warm personality. If I had to give my keys to someone in case of getting locked out of the house, he’d be the kind of guy I’d go to.”
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Poor, poor Wharton students. Thing have gotten so bad that the last resort has become “a job teaching in Dubai,” “the State Department,” or, yes, “becoming a rabbi.”
“It’s always been about the brass ring and it’s always been about the brand recognition, and for a lot of students that meant jobs at Goldman Sachs,” said Emanuel Sturman, director of career services at Dartmouth College. “It’s premature to say the bloom is off the rose totally, but I think students are starting to look at a wider array of brass rings.”
So having discovered that, once you take finance out of the picture “…a lot of Wharton people were interesting” and as the recession greedily licks up their tears of ultimate sorrow, what advice might we have for Riana, Daniel and Jessica, oh, wisest Dealbreaker?
Business Grads Looking Beyond Wall Street [The New York Times]
My name is Mordechai Chang* and I’m a sophomore at this wonderful business school. In what I hope is more or less a weekly blog post, I’ll be complaining about a lot of shit and recapping amusing events from the past school week. The beginning of sophomore year here is also the beginning of “core” Wharton classes where we begin corrupting our soul.
So let’s begin.
*Clearly not my real name. Just representing the two biggest groups here. Jews and Asians. And don’t worry, I got that yellow fever.
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The Wharton School announced the death of Thomas Dunfee, former Vice-Dean of the school’s undergraduate division, in an email to students yesterday. Dunfee, a professor in the Legal Studies and Business Ethics division, worked for 34 years at the school. R.I.P. Tom. (Here’s a link to the memorial site Wharton set up for him.)
So what does this mean for the school housed under the Eye of Sauron, a.k.a Huntsman Hall? Let the speculation begin on who Wharton brings in to replace Dunfee and teach the up-and-coming “masters of the universe” “ethics.”
–by DealBreaker intern and Senior B-School Correspondent Travis.
