Mark Satterthwaite
A.C. Buehler Professor in Hospital & Health Services Management, Professor of Strategy at Kellogg School of Management
Schools
- Kellogg School of Management
Links
Biography
Kellogg School of Management
Mark Satterthwaite is the A.C. Buehler Professor in Hospital and Heath Services Management, a Professor of Strategy, and a Professor of Managerial Economics at Northwestern's Kellogg School of Management. He is also a Professor of Economics (by courtesy) in Northwestern's Weinberg College of Arts and Sciences. He received his B.S. degree in 1967 from the California Institute of Technology and his Ph.D. in 1973 from the University of Wisconsin-Madison. He joined Kellogg directly out of graduate school in 1972 as an assistant professor and was promoted to professor in 1978.
Satterthwaite is a microeconomic theorist who has a keen applied interest in how health care markets work. His theoretical work is in two areas. The first is on how market mechanisms, when the number of participants is large, induce individuals to reveal their valuations almost accurately and select almost optimal allocations. The second is the dynamics of competition under entry, exit, and investments into competitive advantage. On the health side, he is concerned with how consumer information affects competition among physicians and how the prices for hospital services are determined within a managed care environment. He has published his work in leading journals including Econometrica, the Journal of Political Economy, the Review of Economic Studies, the Journal of Economic Theory, the Rand Journal of Economics. and Games and Economic Behavior. He is an elected fellow of both the Econometric Society and the American Academy of Arts and Sciences as well as a founding member of the Game Theory Society. He was the recipient of the Tenth Annual Research Award from the National Institute for Health Care Management Foundation, the annual Stanley Reiter Best Paper Award for the article judged best among those published by Kellogg faculty during the preceding four years, and the Robert F. Lanzillotti Prize in Antitrust Economics of the Industrial Organization Society. The National Science Foundation has awarded him several research grants.
Within Kellogg Satterthwaite has taught the MBA courses, "Microeconomic Analysis" and "Industrial Structure and Competitive Strategy." He has served both as Associate Dean for Academic Affairs and as Chair of both the Managerial Economics, Decision Sciences, and Operations Department and the Strategy Department.
Areas of Expertise
Competition in Healthcare
Game Theory
Healthcare Management
Industrial Organization Economics
Education PhD, 1973, Economics, University of Wisconsin, Madison
MS, 1969, University of Wisconsin, Madison
BS, 1967, California Institute of Technology
Academic Positions A.C. Buehler Professor in Hospital and Health Service Management, Kellogg School of Management, Northwestern University, 2003-present
Professor of Strategic Management, Kellogg School of Management, Northwestern University, 1985-present
Professor of Economics (by courtesy), Weinberg College of Arts and Sciences, Northwestern University, 1983-present
Professor of Managerial Economics, Kellogg School of Management, Northwestern University, 1978-present
Earl Dean Howard Professor of Managerial Economics, Kellogg School of Management, Northwestern University, 1983-2003
Visiting Professor, California Institute of Technology, 1989-1989
Herman Smith Professor of Hospital and Health Services Management, Kellogg School of Management, Northwestern University, 1981-1983
IBM Research Professor of Managerial Economics, Kellogg School of Management, Northwestern University, 1979-1981
Assistant Professor, Kellogg School of Management, Northwestern University, 1972-1978
Honors and Awards Robert F. Lanzillotti Best Paper Award in Antitrust Economics, Industrial Organization Society
Associate Editor, Theoretical Economics, 05-08
Stanley Reiter Best Paper Award (Co-Winner), Kellogg School of Management, 2005
Fellow, American Academy of Arts and Sciences, 04-04
Tenth Annual Research Award, National Institute for Health Care Management Foundation, 03-03
Founding member, The Game Theory Society, 00-00
Associate Editor, Journal of Economic Theory, 87-07
Fellow, Econometric Society, 86-86
Editorial Positions Associate Editor, Theoretical Economics, 2005-2011
Associate Editor, Journal of Economic Theory, 1987-2009
Education Academic Positions Honors and Awards Editorial Positions
Read about executive education
Cases
Satterthwaite, Mark and Steven R. Williams. 2002. The Optimality of a Simple Market Mechanism. Econometrica. 70(5): 1841-1863.
Strategic behavior in a finite market can cause inefficiency in the allocation, and market mechanisms differ in how successfully they limit this inefficiency. A method for ranking algorithms in computer science is adapted here to rank market mechanisms according to how quickly inefficiency diminishes as the size of the market increases. It is shown that trade at a single market-clearing price in the k-double auction is worst-case asymptotic optimal among all plausible mechanisms: evaluating mechanisms in their least favorable trading environments for each possible size of the market, the k-double auction is shown to force the worst-case inefficiency to zero at the fastest possible rate.
Dranove, David and Mark Satterthwaite. 1992. Monopolistic Competition when Price and Quality are not Perfectly Observable. RAND Journal of Economics. 23(4): 518-534.
Consider the symmetric equilibrium of a monopolistically competitive industry in which manufacturers select price and quality to maximize expected profit and consumers maximize utility by conducting costly search among sellers using an optimal sequential search rule. Consumers search among sellers because (i) each consumer idiosyncratically evaluates each seller's quality and (ii) a retailing sector generates variation in the prices consumers pay. Consumers are handicapped in their search because their observations of firms' price and quality levels are noisy. An improvement in price information is represented by an increase in the precision with which consumers observe sellers' prices. Similarly, an improvement in quality information is represented by an increase in precision with which consumers observe sellers' quality levels. An improvement of either type of information may increase or decrease welfare. The perverse case in which improved price information decreases welfare occurs when price competition among firms becomes so intense relative to quality competition that firms select severely suboptimal levels of quality.
Satterthwaite, Mark and John-Lindell Pfeffer. 2004. Nintendo, Inc.. Case 5-204-262 (KEL087).
The case first describes Nintendo's rise to dominance in the home video game industry in the late 1980s. It then presents the challenges Nintendo faced in 1990 as 16-bit processors entered the market against the 8-bit Nintendo Entertainment System.
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