Carnegie Mellon University

University Seminar on Strategy, Entrepreneurship, and Technological Change

Faculty and students in the program participate in a regular university seminar on strategy, entrepreneurship, and technological change. The seminar combines the perspectives of academic researchers and practitioners. It provides a forum for presentations by both faculty and graduate students and periodically features entrepreneurs, business leaders, and policymakers. Other seminars are regularly conducted throughout the university that are of interest to participants in the program.

2010-2011 Seminars


Collaborative problem solving is important in a wide range of
contexts, including economic production, product development, academic research,
and policy making. Here, I present a formal model of collaborative
problem solving, in which individuals with heterogeneous skill sets collaborate
to solve problems. I show that the number of problems an individual solves is a
supermodular function of her set of skills, and cannot be determined by pricing
her skills individually. I then look at the network formed by the collaborative
links between problem solvers. An individual’s position in this network reflects
the demand for her skills as a problem solver, and the overall structure of the
network reflects the nature of the problem-solving community. I show that the
degree distribution of the network will be fat-tailed–that is, a small number of
players solve the vast majority of the problems, while most players solve relatively
few. This result holds, even when skills are distributed independently
across the problem solvers (Bernoulli Skills Model). The degree distribution
becomes more skewed when problems are difficult for the population, and when
skills are arranged into disciplines (the Ladder Model).

Offshoring and Price Measurement in the Semiconductor Industry

The recent growth in offshore outsourcing of intermediate input production makes it especially critical
that statistical agencies are able to accurately measure quality-adjusted trade flows. To this end, this
paper examines the implications of global production sharing for measuring the price of
semiconductors, a critical input to high-end domestic manufacturing and U.S. productivity growth.
We analyze new transaction-level data on semiconductor wafer fabrication around the world,
including prices and detailed information on key physical attributes of semiconductor wafers.
Semiconductor wafers are a high-value intermediate good in the production of final products in the
semiconductor industry. Using this detailed information on wafer pricing and quantities by country,
the paper documents the effect of shifting sourcing patterns on international prices. Specifically, if
these shifts are ignored, the quality-adjusted price decline for processed wafers is approximately 10.4
percent per year during 2004-2008. Shifts in production location to lower-cost countries contributes
an additional price decline of up to 1.4 percent per year.

From Bench to Board: Gender Differences in University Scientists’ Participation in Commercial Science

This paper examines gender differences in the participation of university life science faculty in
commercial science. Based on theory and field interviews, we develop hypotheses regarding how
scientists’ productivity, co-authorship networks, and institutional affiliations have different
effects on whether male and female faculty become “academic entrepreneurs”. We then
statistically examine this framework in a national sample of 6,000 life scientists whose careers
span more than 20 years. We find sharp gender differences in participation in for-profit ventures,
which we measure as the likelihood of joining the scientific advisory board (SAB) of a
biotechnology firm. Compared to men, women life scientists are much less likely to advise forprofit
biotechnology companies. We also identify factors that contour this gender difference,
including scientists’ co-authorship network structure and the level of support for commercial
science at their universities. Surprisingly, we find that the (conditional) gender gap is largest
among faculty members at the highest status institutions.

Entrepreneurial Activity of Venture Capitalists and it Consequences

Some 15% of new venture capital firms formed from 1992 to 2007 were founded by venture
capital partners at existing firms. This paper investigates the consequences of these employee
spinoffs for parent firms and the characteristics of their founders. As predicted by several spinoff
formation models, high type partners and low type partners at failing parent firms are the most
likely to leave and start a new venture capital firm. After accounting for the endogeneity of
the timing of spinoff formation, estimates reveal a large, negative impact of spinoffs on parent
firm performance. The impact is robust to controls for the quality of the partner that leaves at
spinoff and provides evidence of a transfer of individual-specific human capital to the new firm.
Earlier results on venture capital firm performance persistence (Kaplan and Schoar (2005)) or
social networks (Hochberg, Ljungqvist and Lu (2007)) may be a partner-level phenomenon.

The Performance Implications of Institutional "Fit": Field Experimental Evidence on an Innovation Task

In this paper we present novel field experimental evidence to show that individuals have different preferences for cooperative and competitive institutions for innovation---and these preferences have large, economically significant performance, implications. In the experiment, individuals could choose between a competitive and a cooperative regime to solve a computational-engineering problem faced by NASA’s Space Life Sciences Directorate. The experiment mimicked “open innovation” institutional regimes where individuals can participate in either competitive or cooperative problem solving with both pecuniary and non-pecuniary reward structures. Here we compare the performance of individuals who chose to be in the competitive regime versus those that were assigned to the regime, controlling for their skill level. First we find that those who were given the choice of institutional regime performed significantly better and exerted more effort than those that were assigned to compete. Second we find that the presence of pecuniary rewards resulted in better performance and more effort. Third we find that the impact of choice on performance and effort is equivalent to- and sometimes greater than the impact of pecuniary rewards, showing the importance of to selection and sorting for innovation.

Extensive and Intensive Investment Over the Business Cycle

Investment of U.S. firms responds asymmetrically to Tobin’s Q: Investment
of established firms — ‘intensive’ investment — reacts negatively to Q whereas
investment of new firms — ‘extensive’ investment — responds positively and
elastically to Q. This asymmetry, we argue, reflects a difference between established
and new firms in the cost of adopting new technologies. A fall in the
compatibility of new capital with old capital raises measured Q and reduces
the incentive of established firms to invest. New firms do not face such compatibility
costs and step up their investment in response to the rise in Q. A
composite-capital version of the model fits the data well using aggregates since
1900 and our new database of firm-level Qs that extend back to 1920.

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