Quant catalyst

By Matt Golosinski

When economist Stanley Reiter arrived at Northwestern in 1967, its business school was undergoing a transformation, one that he was expected to accelerate.

The corporate world was growing increasingly complex, demanding that management education be grounded in training far more rigorous and analytical than anything seen at these schools during the preceding half century. To produce the desired candidates, Northwestern was dropping its undergraduate business program in favor of a graduate curriculum. Designing those courses would require uncompromising architects willing to take up the challenge to dismantle moribund models in favor of novel ones.

Reiter had already proven capable of shaking up the status quo. At Purdue University since 1954 — the year after earning his doctorate in economics from the University of Chicago, where he also had been part of the Cowles Commission for Research in Economics — he was part of a team that created the Department of Economics, laying the foundation for what would become the Krannert School of Management. Now, Northwestern looked to him to create an entirely new department within its nascent Graduate School of Management.

That department, Managerial Economics and Decision Sciences (MEDS), would bring an unprecedented level of mathematics — including game theory — to bear on business study. Reiter spearheaded the effort, recruiting some of the brightest young quantitative talent, including David Baron, Ted Groves, Morton Kamien, Mark Satterthwaite, Nancy Schwartz, and others. Doing so altered the entire school.

"Stan Reiter's arrival here in 1967 was a watershed event," Robert Magee, the Keith I. DeLashmutt Distinguished Professor of Accounting Information and Management, has said. "Over the next 15 years, he and his fellow MEDS faculty members built arguably the best economic theory department in the world."

Soon, all other departments had to measure up to the standards set by MEDS, as young, discipline-based researchers became the norm at Kellogg.

Reiter, who this year is retiring after 40 years of service to Kellogg, recalled the early formative experiences as an economics instructor and research associate at Stanford University from 1950-1954.

"I was affiliated with the applied math and statistics departments," said Reiter, the Morrison Professor of Economics and Mathematics. "David Blackwell was there, Ken Arrow. These experiences introduced me to a range of subjects that are foundational to lots of things that go on — or should go on — in schools of management. And that's what I saw as my mission at Kellogg: to bring in the people and create a department out of the ashes of the old establishment."

As MEDS flourished, Reiter, who held a joint appointment with the departments of economics and mathematics in addition to his role at the Graduate School of Management, helped expand its influence. He established the Center for Mathematical Studies in Economics and Management. The interdisciplinary center opened in 1972 and spurred scholarship in mathematical economics and management science.

"The center not only served to unify all this thought at the university, but it became a hot place for economic theory and O.R. and statistics and mathematical economics," recalled Reiter. "We published a series of discussion papers that were sent all over the world."

Today, the legacy of these efforts remains evident throughout Kellogg, which honored the former MEDS Department chair by instituting the Stanley Reiter Best Paper Award in 2002. The annual award is bestowed upon a Kellogg professor who has published a paper deemed "best" over the preceding four years. Reiter himself has published four books and dozens of peer-reviewed articles, and has garnered a Guggenheim Memorial Grant.

Nonetheless, Reiter looks forward to retirement, saying it will allow him "to give up some of the responsibilities that go with being a faculty member, without giving up the privileges that facilitate carrying research and professional interaction." He also plans to pursue his interests in art.