Assistant Professor of Economics
Yale School of Management
Yale School of Management’s Florian Ederer is loved by students for applying scenes from the HBO TV series “The Wire” to illustrate product differentiation, entry deterrence, and tacit collusion, an idea he doesn’t assume credit for, but confesses it was given to him by a friend. This economist is a 2014 Teaching Award recipient and respected researcher. He’s widely recognized for his scholarly work on the peer effects of investor behavior (What happens to CEO incentives when the same investors own all the firms?) as well as behavioral economics, namely how firms design compensation and performance evaluation schemes to motivate workers to innovate, the design of incentive systems that prevent gaming, and the optimal use of feedback mechanisms in organizations.
At current institution since: 2013
Education: PhD in Economics, MIT, 2009
List of courses you currently teach: Behavioral Economics, Competitive Strategy
What are you currently researching and what is the most significant discovery you’ve made from it? Together with my co-authors my current research investigates the impact of common ownership (i.e., investors holding sizeable ownership stakes in several companies in the same or in related industries) on executive compensation and innovation. We theoretically and empirically show that common ownership may dampen the performance-sensitivity of CEO pay, but it may also increase the incentives for corporate R&D investment.
Professor you most admire: My two amazing PhD advisors (Bob Gibbons and Bengt Holmström) have supported me throughout my career. I particularly admire their work on organizational economics and their success in building an inclusive academic community that supports research in this field. I also admire the work of my faculty colleagues (in particular Sharon Oster, Judy Chevalier, and Fiona Scott Morton) in the Economics Group at Yale SOM who have built a supportive research environment for junior faculty members.
“I knew I wanted to be a B-school professor when…I took my first industrial organization class with Simon Cowan as an undergraduate student at Oxford.”
“If I weren’t a B-school professor…I would probably work in finance or consulting – that’s the realistic assessment. Of course, I would rather be a professional ski mountaineer, but sadly, I would never be good enough for that!”
One word that describes my first time teaching an MBA class: Enthusiasm
Most memorable moment in the classroom, or in general, as a professor: My most memorable moments occur every time students tell me that my classes changed how they view and analyze economic interactions in their social or professional life. These have ranged from how these students interpret media bias, respond to price wars, view antitrust policy, use commitment devices to reduce procrastination, or have entered competitive workplace settings despite (gender) stereotypes.
What professional achievement are you most proud of? I am very proud of all my research publications and I am particularly indebted to my co-authors for their help in getting those papers published.
What do you enjoy most about being a business school professor? My job is a never-ending learning experience. Who doesn’t love hearing about and discussing new and interesting research on a daily basis?
What do you enjoy least about being a business school professor? I am not a fan of the administrative complications of signing up non-MBA students for my elective classes.
What is your favorite business-themed movie and what is the biggest lesson that MBA students could gain from it? The inevitable movie about #TrustTheProcess that will be released a few years after the Philadelphia 76ers eventually win the NBA title. It will reinforce the simple lesson that any explicit incentive scheme runs the risk of being gamed. (Yes, I have a research paper about that.)
Fun fact about yourself: I have a near-photographic memory for mountain peaks and I spend far too much time looking at topographical maps of mountain ranges on Google Earth. People also laugh when I tell them that I play the recorder.
Bucket list item #1: The Sphinx … in Alaska, not Egypt! I doubt I’ll ever get to climb and ski it though.
Favorite book: “Bel Ami” by Guy de Maupassant, “Jugend ohne Gott” by Ödön von Horváth, “Schachnovelle” by Stefan Zweig, “Die gestundete Zeit” by Ingeborg Bachmann
Favorite movie: “La Haine” by Mathieu Kassovitz. In addition to its gripping plot and fast-paced editing the film foreshadows many of the problems of social integration in Western Europe today.
Favorite type of music: Bach piano works, Mozart operas, Beethoven symphonies, Led Zeppelin, Guns ‘n Roses, Rage Against the Machine, Justice, and any ‘80s power ballad that’s accessible to my extremely limited vocal range in karaoke. (Sorry, this sounds like a match.com profile answer!)
Favorite television show: The Wire. I am forever grateful to my friend Kudzai Takavarasha who gave me the idea to incorporate some clips from the show to illustrate product differentiation, entry deterrence, and tacit collusion in my teaching.
Favorite vacation spot: Anywhere with snow-covered steep mountain peaks, but if I had to choose just one spot: California’s Eastern Sierra in the spring.
What are your hobbies? Skiing, tennis, climbing and music. I am also a decidedly mediocre, but enthusiastic rec league basketball & soccer as well as baroque recorder & piano player.
Twitter handle: @florianederer
“If I had my way, the business school of the future would have…more diversity and better integration of new learning technologies!
“I took Professor Ederer’s elective on Competitive Strategy last year and was amazed by his level of passion on the subject and the way he integrated real world examples into the course. He met us all where we were and is famous for masterfully weaving “The Wire” (HBO show) and sports metaphors to discuss dynamics of strategy in his lectures. I not only learned a tremendous amount on subject, but thoroughly enjoyed his teaching style and our weekly class discussions on a wide range of topics.”