A Transformative Congreso Futuro in Chile with Thanks to the Organizers, Speakers and Volunteers

Last night I returned from the extraordinary 2019 Congreso Futuro, which took place in Chile from January 14-20. I had been invited to speak at this truly unique Congress last April via a formal letter  from Senator (Senador) Guido Girardi Lavín, President, Future Challenges, Science, Technology and Innovation Commission, who was writing on behalf of the Chilean Congress, the Government of the Republic of Chile and the Chilean Academy of Sciences. This year's Congress was the eight annual one and the Congress has become the most important free and open-access scientific forum in Latin America. According to the invitation: It is unique in the region for providing Nobel laureates, scientists, researchers, artists, opinion leaders and citizens alike the opportunity to experience some of the world’s most cutting-edge research, participate in the understanding of emerging trends and actively engage in the innovation of ideas and debates that directly influence the globe. 

Dr. Girardi is a true visionary and leader and all those who had the fabulous experience of taking part in the Congreso Futuro are indebted to him for the incredible intellectual exchanges, social events, as well as cultural ones. New friendships and partnerships have been made across disciplines and across the globe because of this Congreso Futuro!

The Congreso Futuro was a transformative event and experience with about 100 presenters from around the globe. The attention to detail was incredible, with an individual itinerary provided for each speaker plus each one of us was assigned a student volunteer.  The Congress consists of TED-like talks as well as panels and I thoroughly enjoyed sessions on topics ranging from artificial intelligence to climate change to food insecurity. 

The venue in Santiago was the former National Congress, which is a stunning building surrounded by a garden.

In addition to snacks and lunches provided to the speakers there was even a magnificent banquet last Wednesday evening hosted by the Chilean President Sebastián Piñera at the presidential palace in Santiago. The conversations there that continued throughout the Congress I will treasure.

There was a full day (last Saturday) on the Nobel Prize Dialogue on The Future of Learning in  which 4 Nobel laureates took part and representatives from the Nobel Foundation and panelists as well. There was a lovely lunch provided and closing remarks, and since I have had Visiting Professorships at both KTH in Stockholm and at the University of Gothenburg in Sweden it was delightful to meet the delegation from Sweden.

I had the pleasure of speaking in Santiago on January 15 and then at one of the regional venues in Valparaiso on January 17. At the former, I was part of a session on Making Sense of Complexity Through Simplicity that included Daniel Hurtado of the Pontificia Universidad Catolica de Chile,  Robert Sutor of IBM (who was born in Yonkers, where I obtained much of my schooling), and Brian Farrell of Harvard University. My talk in Santiago was on The Era of Supernetworks and it was livestreamed.

My presentation in Valparaiso was on Women in Science: A Personal Journey and the video can be accessed here (with Spanish translation). I expect that, as in previous years, all the talks in Santiago will be posted soon. Joining me in Valparaiso at the National Congress were the Nobel laureate Michael Kosterlitz, professor at my alma mater Brown University, Amber Case, and Floyd Romesberg and we enjoyed travel there and back with our great driver, Juan Carlos, and even had a tour of Valparaiso, which is a UNESCO site. Each talk was followed by a very stimulating panel and discussions.

At our event, 8 ambassadors of Latin American countries came to our talks and panels that followed and even joined us for lunch!

We were hosted in Valparaiso by Senador Chahuan and we thank him for the exceptional hospitality! 

I was thrilled when a group of girls showed up for my presentation in Valparaiso who are part of an award-winning national robotics team and also was absolutely delighted when Dean Juan Kuznar even mentioned the Stem Gems book, edited by Stephanie Espy,  in which I am featured, along with 43 other role models for young girls.

To the wonderful speakers, who are true trailblazers that I met and I will never forget; to the superb student volunteers and staff, and to the extraordinary organizers, a thank you from the bottom of my heart! You set new standards for intellectual exchanges and experiences! Also, many thanks to the wonderful journalists, including Macarena Pizarro of CNN Chile, who took the time to interview me.

Goodbye, beautiful Chile, and the fabulous Congreso Futuro! Till we meet again!

And, to add to the Chilean experience, last Saturday night at about 10:30PM as I was drifting off to sleep because of an early departure back to North America the next morning, my bed in the hotel room started shaking, and when I checked the Chilean news there had, indeed, been an earthquake in Coquimbo, registered at 6.7.

Rest in Peace, John F. Nash, INFORMS Fellow and Nobel Laureate in Economic Sciences

I just heard the shocking news that John F. Nash, an INFORMS Fellow, in the inaugural class of 2002,  and 1994 Nobel laureate in Economic Sciences,  was killed in a taxi crash on the New Jersey turnpike.  He was traveling with his wife of many years, Alice Nash, who also died in the crash.

Just last week, John Nash had been in Norway to receive the Abel Prize for his contributions to mathematics.

Here I am in Sweden writing another book and in almost every chapter I am citing the work of John Nash, specifically, his contributions to noncooperative game theory.

It is such a horrible shame that he and his wife died in this way.

He had a Brilliant Mind.

He had  lectured at UMass Amherst in October 2002 on Ideal Money and Asymptotically Ideal Money. The below photo is courtesy of UMass Amherst.

I have written about John Nash and his influence on my work and that of others several times on this blog and I leave you with the link to a previous post.

Rest in Peace, John Nash, and your wife, as well! Many, many thanks for your incredible contributions to mathematics, operations research, and economics!

Information Asymmetry, Nobel Prize in Economics, and Favorite Chidlren's Books

In a recent post I wrote about the 2013 Nobel laureates in Economic Sciences and connections to and  reflections on Operations Research.

In parallel, I have been doing research, when not conferencing and teaching, on supply chains and information asymmetry.

Of course, George A. Akerlof's paper, "The Market for "lemons": Quality Uncertainty with the Market Mechanism," published in The Quarterly Journal of Economics in 1970 is the classic in information asymmetry. And, you may recall that I wrote about believing in your work, since this paper was rejected by journals 3 times, and then was published and earned Akerlof the Nobel Prize in Economic Sciences in 2001.

Akerlof is married to Janet Yellen, who has been in the news a lot lately since  President Obama has selected her to be the next chair of the Federal Reserve Bank, succeeding Ben Bernanke. She and I share the same undergraduate alma mater, Brown University, although we did not overlap in our studies. She then went on to receive her PhD at Yale in economics.

Also, the most recent paper that my team at the Supernetworks Center wrote was inspired by Akerlof's lemon paper. The paper is Spatial Price Equilibrium with Information Asymmetry in Quality, Anna Nagurney, Dong Li, and Ladimer S. Nagurney. We are completing another paper on this general theme and have authored several papers on quality and supply chains as well as quality and the future Internet.

Coincidentally, in preparing my blogpost on the 2013 Nobel laureates, I came across George Akerlof's Nobel Prize acceptance speech and I have been smiling ever since.

He begins his Nobel speech Behavioral Macroeconomics and Macroeconomic Behavior (the text is here) with: Think about Richard Scarry’s Cars and Trucks and Things That Go. Think about what that book would have looked like in sequential decades of the last century had Richard Scarry been alive in each of them to delight and amuse children and parents. Each subsequent decade has seen the development of ever more specialized vehicles. We started with the model-T Ford. We now have more models of backhoe loaders than even the most precocious four- year old can identify.

Can you believe it -- starting a Nobel prize speech by acknowledging a children's book and in a series which was one of my daughter's favorites as a child. When we traveled and lived n Europe we would see Richard Scarry's books in bookstores and libraries with such favorite characters as Huckle Cat and Lowly Worm in different languages. The humor, lessons, and imagination in these books we treasured and we have kept many in our collection.

Below, I feature a photo taken yesterday of some of our favorite Richard Scarry books in honor of Akerlof and his work and his wife, whom he acknowledged in his speech.

Never lose your sense of wonder and never give up! And when life gives you lemons, make lemonade!

Akerlof mentioned Robert Shiller's work in his Nobel speech and Shiller is sharing the 2013 Prize with Fama and Hansen -- small world!

Since Akerlof and Yellen have a son, who has a PhD in economics, and is also a professor,  I suspect that they read Richard Scarry books to him when he was a child.

2013 Nobel Laureates in Economic Sciences -- Reflections and Connections

This time of the year is when the Nobel Prizes get announced (and it is also the time of the year when several of our major conferences take place including the INFORMS one) so there is a lot of anticipation, drama, and excitement.

The 2013 recipients of the Nobel Prize in Economic Sciences are: Professors Eugene Fama and Lars Peter Hansen of the University of Chicago and Professor Robert Shiller of Yale. They are receiving the Nobel prize "for their empirical analysis of asset prices."

Photo courtesy of TT/Claudio Bresciani/AP Bloomberg.com

What continues to amaze me is the connections between economic sciences, including computational economics,  and operations research and the management sciences, over the span of Nobel Prize recipients  in Economic Sciences. The first Nobel Prize in Economic Sciences was given back in 1969 and the full list of recipients (one female to-date, Elinor Ostrom) can be found here on the official Nobel site.

For example, Eugene Fama has published in Management Science: "Three Asset Cash Balance and Dynamic Portfolio Problems." Gary D. Eppen and Eugene F. Fama; Management Science, 1971, 17(5, Theory Series), pp. 311-19.http://links.jstor.org/sici?sici=0025-1909%28197101%2917%3A5%3C311%3ATACBAD%3E2.0.CO%3B2-Y

Also I cited Fama's work in my Financial Networks book, co-authored with a former doctoral student of mine, Stavros Siokos, who actually received his PhD from UMass Amherst in Industrial Engineering and Operations Research and is an extremely successful financier, based in London. We cite Fama's work in the ninth chapter.

As for Lars Peter Hansen, I crossed paths with him back in 2010, when he, Professor Andrew Lo of MIT, and David Marshall organized the Measuring Systemic Risk Conference, which took place in December in Chicago. I spoke on Financial Networks and I acknowledged Hansen on the second page of my talk. Joining me was my wonderful colleague in Finance, who was Professor Lo's doctoral student at MIT, Mila Getmansky Sherman.

Professor Shiller I have never met but I have met his colleague, Karl Case, and have written about their joint work and about NSF and entrepreneurship on this blog.

As for the only female Nobel laureate in Economic Sciences, I will never forget meeting Dr. Elinor Ostrom, when she spoke at UMass Amherst and I brought one of my PhD students with me, who is now Dr. Min Yu. Elinor would visit and work closely with my colleagues at the School of Business, Economics and Law at the University of Gothenburg in Sweden where I have held  a Visiting Professorship.

Along with Professor Hans Amman, I have coedited the Advances in Computational Economics book series (started with Kluwer and now with Springer) and the Nobel laureate, Daniel McFadden, was on our editorial board even before he received the Nobel Prize and I have dined with him at one of our Computational Economics conferences. Chris Sims and Tom Sargent I also met at a Computational Economics conference.  My first book, Network Economics: A Variational Inequality Approach, was the first book in the Advances in Computational Economics book series and it continues to be my most highly-cited work. Its second edition came out in 1999.

And, of course, who can ever forget meeting Paul Samuelson, whose work I have cited since I was a doctoral student at Brown University. As for the Nobel laureate Harry Markowitz, whose work in portfolio optimization I have cited numerous times, I met him at an INFORMS conference in an elevator -- he is over a foot taller than I am!

My INFORMS colleague and fellow blogger. Professor Mike Trick of CMU, wrote last year on Shapley and Roth receiving the Nobel in Economic Sciences and connections to operations research and the management sciences.

A Mathematician Who Never Had an Economics Course Shares the Nobel Prize in Economic Sciences

Being in Sweden is always special and never more so than when the Nobel prizes get announced.

Today, the Nobel prize in Economic Sciences was announced and the recipients are Alvin Roth of Harvard University, who is visiting at Stanford University (although the LA Times says that he actually has accepted a position at Stanford, his alma mater) , and Lloyd Shapley, who is a professor emeritus at UCLA.

We were waiting with bated breath for the announcement at 1PM today and it is great to have game theorists (again) be awarded the Nobel prize.

One of my favorite previous recipients is John Nash, whose work I cite in many of my papers on  oligopoly theory and competitive supply chains.

I found the following quote from Shapley, who learned that he and Roth had won the $1.2 million award from an Associated Press photographer and another journalist who went to his home in Los Angeles early Monday.,  interesting and it was published in the Boston Herald (which has Roth still at Harvard):

"I consider myself a mathematician and the award is for economics," Shapley told AP by telephone. "I never, never in my life took a course in economics."

Shapley did much of the theoretical work behind matching algorithms (from couples to kidneys and humans to other applications), whereas Roth is know for his empirical applications.

The late Elinor Ostrom, was the only female recipient of the Nobel prize in Economic Sciences.

She was a regular visitor to the University of Gothenburg, and according to my colleagues here, was working with one of them in the hospital before her death.

Eat Chocolate and Increase Your Chance of Winning a Nobel Prize

I have been blogging from Sweden the past couple of weeks as a Visiting Professor at the School of Business, Economics and Law at the University of Gothenburg.

I love this city and my colleagues and the students and staff cannot be more friendly, interesting, and fun!

This week, the 2012 announcements of the Nobel prizes have started and, appropriately, The New England Journal of Medicine has released a study which I suspect may get an Ig Nobel prize, which is awarded at Harvard University each year.

The paper, Chocolate Consumption, Cognitive Function, and Nobel Laureates, written by Dr. Franz H. Messerli, concludes the following:

Chocolate consumption enhances cognitive function, which is a sine qua non for winning the Nobel Prize, and it closely correlates with the number of Nobel laureates in each country. It remains to be determined whether the consumption of chocolate is the underlying mechanism for the observed association with improved cognitive function.

Slate has a great writeup on this scientific article.

I always knew that chocolate made me happier but now I can also say that it is good for my brain.

Above I have posted a photo of the chocolates in one of my favorite sweet shops on Gothenburg.

Terrific Interview with Nobel Laureate Harry Markowitz Who Almost Did Not Pass His Dissertation Defense

With finance dominating so much of the business news today, one can't help but appreciate the classics in finance and their originators.

The interview in yesterday's New York Times, by Jeff Sommer with Harry Markowitz, the creator of modern portfolio theory, and the 1990 Nobel Laureate in Economic Sciences, along with William Sharpe and Merton Miller, was not only timely but showed how truly original ideas may, at first, not be accepted.

In the interview, it was noted that when  Markowitz defended his doctoral dissertation at the University of Chicago — a treatise on portfolio theory — Milton Friedman (also a Nobel laureate) raised a disturbing objection. Portfolio theory wasn’t economics, Friedman said, and the university couldn’t grant a degree in economics based on it. A few minutes later, Markowitz learned that he would receive his degree after all, but he endured some nervous moments. Years later, Friedman clarified his position somewhat, telling Mr. Markowitz that while he was startled by his student’s novel approach, he was kidding about not granting the doctorate. “Harry, you know we don’t flunk anybody at that late stage,” Mr. Friedman told him. 

Now, Mr. Markowitz says: “It’s possible he really didn’t think it was economics. It’s O.K. At the time it was not economics — but now it certainly is.”

I recall meeting Professor Markowitz in the elevator of a hotel at an INFORMS conference and marveled at his stature -- physical, and otherwise, and was awestruck. He became an INFORMS Fellow in 2002, along with the Nobel laureate John Nash and Kenneth Arrow, as well as many luminaries in operations research and management sciences.

 As  noted in the interview, Markowitz's contributions to portfolio selection are as relevant in the Facebook era as they were over half a century ago, although they are better understood and appreciated today. I also think that it is important to point out all of the algorithmic advances, from quadratic programming to network optimization and even variational inequality algorithms for financial equilibrium models, that have been advanced because of his seminal ideas and work. 

His work has inspired so much research and practice and has led to fundamental insights whose richness has survived over half a century. Finance, from a financial networks perspective, has always fascinated me and I am privileged to be in the  Department of Finance and Operations Management at the Isenberg School of Management. I was lucky to have had a great doctoral student, Stavros Siokos, whose passion for finance, networks, and engineering, enabled us to co-author the Financial Networks book published back in 1997. Stavros' professional success in the financial industry demonstrates the synergies among finance, economics, and optimization and, of course, operations research and management science.

Three years ago, I taught a short course on Portfolio Optimization at Harvard University and, of course, I recognized the fundamental importance and  elegance of Markowitz's work.

I wonder how the financial landscape would have changed if Markowitz's dissertation had not been approved!

For those of you interested and conducting research on financial networks, I am editing a special issue on the topic for the journal Computational Management Science.

The call for papers has been circulating and my colleague, Nikunj Kapadia, who is now on leave at the Office of Financial Research in Washington DC, sent me a message stating:

News of your special issue is going around at the OFR! It is of great interest to us here.

A Tribute to the Nobel Laureate William N. Lipscomb

Professor William "Bill" Lipscomb, a Nobel Laureate in Chemistry and long-time Harvard professor, passed away on April 14, 2011, at age 91.

I had heard a lot about Professor Lipscomb since my husband had been in the same class at Lafayette College as his son, James, and he had met him several times. Later, I even met Professor Lipscomb at a chamber music event at Brown University organized by the American Mathematical Society (AMS) (all performers had to be members of the AMS so since his particular instrument, the clarinet, was needed, he was quickly made an honorary member).

It was clear that not only did Professor Lipscomb love music and performing, and wearing a string tie, even to the Nobel ceremony, but he also loved science and he was so successful at it. The Nobel laureate, Dr. Linus Pauling, was his mentor and Lipscomb switched from physics (my husband's major) to chemistry under his influence.

Not only did Dr. Lipscomb receive a Nobel prize, but two of his graduate students did, as well, plus another student who had spent time in his lab! And it all started with a chemistry set that he received at age 11.

His sense of humor was legendary, and he was an avid participant in the annual Ig Nobel prize ceremonies at Harvard (which I have blogged about).

The Boston Globe, in a touching obituary, has the following quote from Professor Lipscomb, which is so true:

“A scientist proceeds in making discoveries in very much the same way that an artist goes about working,’’ Dr. Lipscomb said in a 1981 US News & World Report interview.

“You have to master a large discipline, and your discoveries are not necessarily made by planning them. They arise intuitively. You suddenly perceive brand-new connections that you were unaware of before. Material somehow reorganizes itself in your mind, and that leads to the spawning of a new group of ideas.’’

According to his son, James, Lipscomb was humble and exhibited his characteristic self-deprecating humor even after being awarded the Nobel.

"He said something like 'I knew that I'd written a lot of good papers, but I didn't know that anyone had read them,'" James said.

Supply Chain Network Design and Redesign, Game Theory, and Nash Equilibria

There is a wonderful interview (but too short) by Ron Howard, the Director of the Academy Award winning movie, "A Beautiful Mind," with John F. Nash Jr., the 1994 Nobel laureate in Economic Sciences, in a trailer that accompanies the DVD of this movie. I had the pleasure of recently seeing both.

As John Nash walks away at the end of the interview, bundled up in a warm overcoat and knit cap, he ruefully comments that he has lost so many years and he needs to get back to research since that is what matters.

John Nash's contributions to game theory earned him the Nobel Prize. His work has influenced numerous disciplines, in addition to economics, notably, operations research and management science, political science, applied mathematics, and computer science.

I cite Nash's classical (1950) and (1951) papers in many of my papers that deal with competition.

For example, in a paper, "Supply Chain Network Design Under Profit Maximization and Oligopolistic Competition," which was published recently in the journal, Transportation Research E (2010), I devised a model in which firms seek to determine their optimal supply chain network designs in terms of manufacturing, storage, and shipment capacities, as well as product flows so as to maximize profits. The governing concept is that of a Nash - Cournot equilibrium. This model extends my earlier model in which a firm seeks to design (or redesign) its supply chain network so as to minimize its total costs associated with capacity enhancements (even from scratch) as well as the operational costs. In the latter, no competition was assumed. That study, "Optimal Supply Chain Network Design and Redesign at Minimal Total Cost with Demand Satisfaction," is in press in the International Journal of Production Economics.

High tech companies, including Samsung, Hewlett Packard, and IBM, as well as apparel companies from Benetton to Zara well understand the competitive advantages of careful cost control in supply chains. In addition, more and more companies, including Frito-Lay, Tesco, P&G, and Colgate are being recognized for their supply chain performance.

The analytical challenges of identifying not only the optimal capacities associated with various supply chain network activities, coupled with the optimal production quantities, storage volumes, as well as shipments are tremendous, since the possibilities of where to site manufacturing plants and distribution centers, for example, and at which capacities, may be great. Furthermore, the determination of the optimal supply chain network design (or redesign if a supply chain network already exists with some capacities) needs to be done in a rigorous manner that captures the system-wide nature of the problem.

I've also recently made use of the Nash equilibrium concept in devising a model to capture the gains of possible mergers and acquisitions of firms which are competitors. That paper, "Formulation and Analysis of Horizontal Mergers Among Oligopolistic Firms with Insights into the Merger Paradox: A Supply Chain Network Perspective," is in press in the journal Computational Management Science.

The algorithms that can be applied to determine the optimal designs of supply chain networks, operating either in a centralized manner or in a competitive, decentralized manner, are also reported in the above papers.

I agree with Nash that it is imperative to carve out the necessary time to do research.