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Posted 3.20.07

Weatherheadlines recently sat down with Jim Rebitzer, Francis Tracy Carlton Professor of Economics and chair of the economics department, to learn more about transitioning from biology to economics, his research into organizations' incentive systems, and his alter ego that lives in California.

Q: From where do you originally hail? From which school(s) was your degree awarded?
I grew up in Chicago and went to undergraduate school at the University of Illinois at Urbana where I earned a bachelor's degree in biology. I became interested in economics late in my undergraduate career, in large part because I wanted to make sense of my family's experience with unemployment. This was during the 1970s when recessions and oil price shocks hit the industrial Midwest and Chicago very hard. I discovered that I liked economics more than biology, so I went to graduate school at the University of Massachusetts in Amherst, Mass.  Although I made the right choice in giving up biology, I still am very interested in biology, especially evolutionary biology which turns out to have surprising and deep connections to economics.

My first job after getting my Ph.D. was at the University of Texas in Austin, TX. After three years as an assistant professor in the economics department, I was offered a job at MIT's Sloan School of Management where I taught labor economics, human resource management and negotiations.

Q: What brought you to the Weatherhead School?
I was offered the Carlton Chair in Economics here at Case and my wife also found employment in Cleveland as a law professor. She's an associate professor at Cleveland State University's Cleveland-Marshall School of Law.

Q: How long have you been a professor at the Weatherhead School?
Since 1997.

Q: I understand you are currently on sabbatical. What classes do you usually teach?
Labor Economics to undergraduates, Organizational Economics to M.B.A.s and executive M.B.A.s and Negotiations to M.B.A.s.

Q: On which topics do you focus your research?
Most of my research concerns the workings of incentive systems in organizations. I first became interested in this topic because I wanted to understand the phenomenon of unemployment. In the early to mid-1980s, understanding the causes of high unemployment and inflation was the key problem for economic policy. Some of the most promising explanations at that time centered on the wage setting policies of firms -- especially on policies that used wages both to attract employees and to incent them to work hard. In the course of my studies, I realized that economics didn't have much to say about the incentives used by firms. At MIT I discovered a whole group of academics (some economists and some not) who were working to close this gap in our understanding by studying the internal structures and policies of firms. This line of research has since evolved into an important new economic discipline, organizational economics, which is now taught at every major management school in the country.

Shortly before moving to Case, I decided that the design of incentive systems was becoming especially important in health care, so I began devoting more and more time to studying the health care industry. Some of the research that grew out of this effort focused on how physicians respond to high powered incentives that HMOs offer for cost containment. More recently my work has focused on the effects of IT-based decision support systems that help physicians spot errors. I am currently working on a project that examines how our employer-based health care system distorts insurer's incentives to invest in the future health of their policy holders.

Health care is one of the largest and fastest growing sectors of the economy in Northeast Ohio (and indeed the nation). I have found in my research that "getting incentives right" can be a powerful means of controlling costs while sustaining high levels of care quality. Unfortunately my findings also indicate that getting incentives right is fiendishly difficult.

Q: What do you like to do in your spare time?
I like to hike and cross-country ski in beautiful locations with my family and friends. In my spare time I also am learning Tai Chi.

Q: In a movie about your life, which actor would you choose to play your role?
I didn't know how to answer this question, so I asked my 16 year old daughter. Her immediate response was "Tom Hanks, because he's old."

Q: What is a surprising fact about yourself that you would like to share with the Weatherhead School community?
I have an identical twin brother who lives in Palo Alto. He's a really great guy -- and remarkably good-looking.

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