About

David Besanko is the IBM Professor of Regulation and Competitive Practice at the Kellogg School of Management at Northwestern University. He is a graduate of Northwestern University, where he received his Ph.D. in Managerial Economics and Decision Sciences in 1982, and Ohio University, where he earned his BA in Political Science in 1977. Prior to joining Kellogg in 1991, he was a faculty member at Indiana University’s School of Business and worked at Bell Communications Research. His teaching at Kellogg includes courses in public economics and infrastructure strategy. Besanko's research covers topics relating to the intersection of competitive strategy and public policy, the economics of regulation, and the theory of the firm. He has published over 50 articles in leading journals such as the American Economic Review, Econometrica, and the Quarterly Journal of Economics. He is also a co-author of the book 'Corporate Reputation and Social Activism' and the widely used textbook 'Microeconomics.' Throughout his career, he has received numerous teaching awards, including the Aspen Institute's Faculty Pioneer Award in 2015, and has been recognized multiple times with the Kellogg School's top teaching honors. He has served in various administrative roles at Kellogg, including Senior Associate Dean for Academic Affairs, and has been actively involved in editorial positions for academic journals.

Research topics

• Business
• Public economics
• Computer Science
• Political Science
• Economics
• Computer Security
• Microeconomics
• Law and economics
• Macroeconomics
• Public administration
• Law

Selected publications

• Rules for the rulemakers: asymmetric information and the political economy of benefit-cost analysis

  Journal of Regulatory Economics · 2024

  1st authorCorresponding
  • Political Science
  • Computer Science
  • Computer Security
  PublisherDOI

• Designing Regulatory Policy

  Routledge eBooks · 2020

  1st authorCorresponding
  • Business

  This book reviews and interprets the literature that examines the design of regulatory policy when the regulator's knowledge of the relevant environment is limited. It will be useful to professional economists wishing to keep up with the development of their science.

  PublisherDOI

• Insurance access and demand response: Pricing and welfare implications

  Journal of Health Economics · 2020 · 18 citations

  1st authorCorresponding
  • Economics
  • Business
  • Public economics
  PublisherDOI

• Sacrifice tests for predation in a dynamic pricing model: Ordover and Willig (1981) and Cabral and Riordan (1997) meet Ericson and Pakes (1995)

  International Journal of Industrial Organization · 2019-07-25 · 9 citations

  article1st author
  PublisherDOI

• How Efficient Is Dynamic Competition? The Case of Price as Investment

  American Economic Review · 2019-08-29 · 18 citations

  article1st authorCorresponding

  We study industries where the price that a firm sets serves as an investment into lower cost or higher demand. We assess the welfare implications of the ensuing competition for the market using analytical and numerical approaches to compare the equilibria of a learning-by-doing model to the first-best planner solution. We show that dynamic competition leads to low deadweight loss. This cannot be attributed to similarity between the equilibria and the planner solution. Instead, we show how learning-by-doing causes the various contributions to deadweight loss to either be small or partly offset each other. (JEL D21, D25, D43, D83, L13)

  PublisherDOI

• Target Selection by Activists and the Structure of Competition

  Oxford University Press eBooks · 2019-09-18

  book-chapter

  This chapter extends the model to include two potential targets for campaigns. Activists targeting firms in different industries are shown to be likely to focus on the firm with the weaker reputation or greater sensitivity to reputation. The latter finding rationalizes the practice of secondary targeting in which an activist targets a consumer-facing company that cares a lot about its reputation rather than the companies in its supply chain creating the harm. In the case of two potential targes in the same industry, the competitive interdependence between the two firms affects the targeting decision. When it is weak—e.g., when firms sell differentiated products—the activist tends to target the firm whose characteristics predispose it to engage in more private regulation than its rival (e.g., the more patient firm, the market leader). When competitive interdependence is strong—as in commodities industries—the activist targets the firm predisposed toward less private regulation.

  PublisherDOI

• Restructuring Rail Systems

  2019-04-25 · 1 citations

  book-chapter1st authorCorresponding

  Policymakers have adopted two broad approaches to restructuring newly privatized rail systems: horizontal separation and vertical separation. Existing literature has identified potential advantages and disadvantages of these approaches, but it leaves unresolved conclusions about the broader impact of these approaches on consumer and social welfare. This chapter develops a conceptual framework for thinking through these impacts that starts from the recognition that these two structure structures create different incentives for pricing rail transport services and for investing in network quality. We conclude that horizontal separation is likely to outperform vertical separation in inducing investments in network quality and may also tend to result in higher levels of consumer surplus and social welfare, although there are also reasons why vertical separation might outperform horizontal separation on these metrics. The best-case scenario for vertical separation to create high levels of consumer and social welfare is for price competition between rail transport operators to be intense (though the combination of economies of density in freight operations and sunk costs of entry may limit entry into the market, making this scenario the exception rather than the rule). The best-case scenario for horizontal separation to create high levels of consumer and social welfare occurs when there is modest, but not cutthroat, competition between the vertically integrated systems. Ensuring these best-case levels of competition is a partly function of public policy, and on balance, horizontal separation may be a better option than vertical separation in countries with less well-developed regulatory institutions and public governance. The chapter concludes by applying the insights of framework to freight railway restructuring in China.

  PublisherDOI

• An Introduction to Corporate Campaigns

  Oxford University Press eBooks · 2019-09-18

  book-chapter

  In recent years, many activists have concluded that public processes, such as new legislation, regulatory enforcement, or lawsuits, respond too slowly and can be blocked too easily by special interests. In response they have turned to private politics instead. Private politics refers to actions by private interests, such as activists and nongovernmental organizations (NGOs), that target private agents, typically firms. This chapter describes two key elements of private politics: corporate campaigns and private regulation. It discusses the logic of corporate campaigns, how firms endeavor to respond to them, and empirical evidence on the consequences of campaigns. It then turns to private regulation, and its close counterpart, corporate social responsibility. The chapter raises a puzzle about corporate social responsibility that the models in later chapters will help resolve. The chapter concludes by providing an overview of the remainder of the book.

  PublisherDOI

• Replication data for: How Efficient Is Dynamic Competition? The Case of Price as Investment

  ICPSR Data Holdings · 2019-01-01

  datasetOpen access1st authorCorresponding

  We study industries where the price that a firm sets serves as an investment into lower cost or higher demand. We assess the welfare implications of the ensuing competition for the market using analytical and numerical approaches to compare the equilibria of a learning-by-doing model to the first-best planner solution. We show that dynamic competition leads to low deadweight loss. This cannot be attributed to similarity between the equilibria and the planner solution. Instead, we show how learning-by-doing causes the various contributions to deadweight loss to either be small or partly offset each other.

  PublisherDOI

• Conclusions: What Have We Learned?

  Oxford University Press eBooks · 2019-09-18

  book-chapter

  This chapter summarizes each preceding chapter and then offers lessons for scholars and practitioners. Scholars should note the value of dynamic modeling in understanding interactions between activists and firms in the realm of private politics. Activists and firms can use the insights of the model to approach corporate campaigns more strategically. For example, for activists, the framework suggests that efforts aimed at hurting the reputations of firms can do more than serve an ideological aim at making companies look bad, or as a device to threaten harm. Activists can play the role of private regulators when effective public regulation is missing. For leaders of firms, the analysis highlights that corporate social responsibility and other initiatives can serve to enhance a firm’s reputation, but they can also be viewed as a form of risk management in the face of activist pressures that can potentially harm reputation.

  PublisherDOI

Frequent coauthors

• Ulrich Doraszelski

  University of Pennsylvania

  27 shared

• Yaroslav Kryukov

  University of Pittsburgh Medical Center

  11 shared

• Daniel F. Spulber

  Northwestern University

  10 shared

• Daniel Diermeier

  Vanderbilt University

  9 shared

• Mark Shanley

  University of Illinois Chicago

  9 shared

• Mark A. Satterthwaite

  Northwestern University

  8 shared

• David P. Baron

  Stanford University

  8 shared

• Nabil I. Al‐Najjar

  Kellogg's (Canada)

  7 shared

Awards & honors

• Aspen Institute's Faculty Pioneer Award (2015)
• L.G. Lavengood Professor of the Year Award (1995, 2010, 2016…
• Alumni Choice Teaching Award (2006)
• Sidney J. Levy Teaching Award (1998, 2000, 2009, 2011, 2013,…
• Chair's Core Teaching Award (1999, 2001, 2003, 2005)