Lawrence M v D Schloss Economics Prize

Professor Castaneda receives the prize from Provost Bernstein.

Inaugural Recipient Marco Castaneda

Larry Schloss, Chairman and CEO of Diamond Holdings and a member of Tulane's Board, among his other gifts to the University, has endowed a prize for excellence in Economics. Specifically: "The Schloss Prize is to be offered to outstanding full professors, associate professors, or assistant professors or a graduate student or undergraduate student who does outstanding work in the Department of Economics."

Mr. Schloss, who was a Tulane scholar, is a 1976 graduate, cum laude, from Tulane; who went on to earn an MBA from the Wharton School. Following his formal education, Mr. Schloss has had a truly distinguished career in the financial services industry. He was Global Head of CSFB Private Equity, a $32 billion alternative asset investment business, and a member of the CSFB Executive Committee. As Global Head of CSFB Private Equity, Mr. Schloss was responsible for a staff of 450, including 125 investment professionals on four continents and a 60-person private equity fundraising group.

Mr. Schloss joined DLJ in 1978 as an investment banker focused on leveraged finance and energy, and began investing DLJ capital when the firm began its dedicated leveraged buyout principal investing activities in 1985. He led highly successful transactions including GTECH Corporation and OSi Specialties. He became Chairman of DLJMB in 1995.

Prior to DLJ's Acquisition, Mr. Schloss was Chairman of DLJ Merchant Banking. Under his leadership, the alternative asset investment business at DLJ grew to include $19 billion under management across various fund strategies. Mr. Schloss was a member, Chairman or Co-Chairman of the investment committees of each of the DLJMP leveraged buyouts funds, as well as the mezzanine funds, real estate funds, secondary funds and funds of funds. As a member, Chairman or Co-Chairman of the investment committees of the various DLJMB funds, he oversaw investments in over 200 companies with total transaction value in excess of $100 billion.

The inaugural recipient of the prize is Marco Castaneda, an assistant professor in the Economics Department. Marco is an applied microeconomist whose main interests are in the areas of microeconomic theory and industrial organization. His current research investigates the implications of managerial and transaction costs, and incomplete contracts for understanding the organization of production.

A recent, and timely, application of his research concerns the existence and performance of not-for-profit organizations. The not-for-profit form of organization dominates many important industries in the economy, such as healthcare and education, but little attention has been paid to the questions of what are the conditions which facilitate the emergence of not-for-profit organizations and what mechanisms ensure that not-for-profit organizations perform relatively well. A related question concerns the differences in the behavior and performance of for-profit and not-for-profit hospitals. The hospital industry has a multi-century history of being dominated primarily by not-for-profit organizations, but over the last three decades the number and market share of for-profit hospitals has increased considerably. The changing composition of the industry could have important implications if for-profit and not-for-profit hospitals behave differently.

Marco has had a very successful year, with three publications in high quality journals, one of which also won a prize for the best paper by a younger scholar.

• In the paper "Competition, Contractibility, and the Market for Donors to Nonprofits" (with John Garen and Jeremy Thornton), we investigate theoretically and empirically the effects of competition for donors on the behavior and performance of not-for-profit organizations.
  
• In the paper "Does a Hospital's Profit Status Affect its Operational Scope" (with Dino Falaschetti) we investigate how the organizational form of a hospital is related to its scope of operations. This paper was selected as the best paper by a younger scholar published last year in the Review of Industrial Organization. In other work in progress, I investigate the differences between for-profit and not-for-profit hospitals in other dimensions, such as the costs and quality of healthcare and the provision of uncompensated care.
  
• In the paper "A Model of Commodity Differentiation with Indivisibilities and Production" (with James Marton), we prove the existence of an equilibrium for a production economy with commodity differentiation and indivisibilities and show the equilibrium price of a commodity varies continuously with the characteristics of the commodity.

The Department of Economics is proud of Marco's success. The Economics Department's Committee on Prizes (Professors Nelson, Olson, and Shimshack) had an easy time selecting Marco Castaneda as the inaugural recipient of the Lawrence M v D Schloss Economics Prize.

In addition to recognizing Marco's accomplishments this year, the presentation of this inaugural prize is a particularly appropriate time for the Department of Economics to express its deep thanks to Larry Schloss for his generous gift. We are proud of all of our graduates, but Larry's accomplishments are truly extraordinary. To crown those accomplishments with this kind of generosity makes him a very special graduate indeed.

Papers

• "Competition, Contractibility, and the Market for Donors to Non-Profits," (with John Garen and Jeremy Thornton), Journal of Law, Economics, and Organization 24(1), 215-246 (2008).
  
• "Does a Hospital's Profit Status Affect its Operational Scope?," (with Dino Falaschetti), Review of Industrial Organization 33 (2), 129-159 (2008).
  
• "A Model of Commodity Differentiation with Indivisibilities and Production," (with James Marton), Economic Theory 34 (1), 85-106 (2008).