#1 for Finance... Chicago GSB or Wharton??

Question

I have heard some say that Wharton is #1 for finance... I am interested in why this is a common belief...

Just thinking about modern financial/economic theory

Milton Friedman's Monetarism
Miller-Migdolani, Fama-French, and others on the Capital Asset Pricing Model
Black, Scholes, Merton for Options...

So much modern financial theory and a huge number of Nobel Prize winners come from one place... Chicago! Why then doesn't GSB overwhelmingly rank #1?

I'm not trying to be opinionated... I am ligitimately interest... Help me out!

3underscore · Answer

I know what you mean Mark. Chicago does dominate for retrospective ground-breaking research from the school.

But whatever edge they had from developing these is long gone. I learned and wrote essays on CAPM at University. 

Its the difference between legacy and now, and what benefit you get from an MBA rather than a PhD and such. Chicago is bagging Nobel prizes for work done 20 years ago. The question is who will be bagging them in 20 years time.

rhyme · Answer

Well, we know GSB is better because I'm not going to Wharton, so it must be better.

I think they are, honestly, equals - or that any true difference is negligible. I think the perception that W is better than chicago tends to come from the continued propogation of the moniker H/S/W.

gmatclb · Answer

Chicago still has the leading faculty in finance. Yeah they had all those old-timers, but to say that they no longer have the leading innovators is false (from what I've read in publications)

I think Wharton is regarded as #1 in finance because they are the best at putting their students in top finance positions (I don't know if this is entirely true. Just going off hearsay.)

But education-wise and learning from the innovators in finance... Chicago is best.

standard · Answer

Wharton name goes a VERY long way.

However, judging from my knowledge, GSB has a better curriculum and better instructors.

The difference between two schools is very minor, they both sit on the throne of Finance oriented MBA kingdom.

pelihu · Answer

My sense is that Wharton has a better professional reputation, while Chicago has the advantage in theory.

lhotseface · Answer

Your question contains the answer...MBA finance is not about theory but application ! That's where Wharton kicks ass...

Mark4124 · Answer

Well... probably doesn't hurt when investment managers are finishing up their CFA, deciding who to hire for analysts, and come accross Chicago everywhere in their study. 

Here at Fidelity of Portfolio managers...

Wharton 14
Chicago 11
Harvard 8

rhyme · Answer

BAH. GSB ALL THE WAY.

Wharton sucks because it sounds like some kind of disease. 
"Hey you hear that Tom's out sick?"
 "Yea, man its really bad apparently"
"What's he got?"
"Dood he totally came down with Wharton"
"No way!"
"yea way! His face now has Wharts On it." 
"Wharts?"
"Yea, Wharts."
"Don't you mean Warts?"
"No, I mean Wharts. And how can you tell anyway? Were talking not writing."
"Good point. Wharts eh? On his face?"
"Yea, WhartOn is a bad disease."

lhotseface · Answer

Rhyme is a GSB groupie.

rhyme · Answer

You know it.

3underscore · Answer

gmatclb - please share what you consider to be GSBs groundbreaking theory it has developed recently.

This isn't interview crap or anything, I am genuinely interested in what you think is going to be groundbreaking theory, and beyond that stuff that will be part of your MBA.

Option pricing = big game
Credit derivatives = big game

Economics =/ Finance (I am an economics major, I will argue this point)

Honestly, I am facinated to see what there is going on now, as I have little time to read papers.

gmatmba · Answer

Somewhere in the specialty rankings I always see
Wharton = 1st in Finance
Chicago = 1st in Accounting

gmatclb · Answer

I wasn't implying that Chicago GSB put out some ground-breaking work recently. Although, I am interested to know.

What I meant is that some winners of the Nobel Prize still teach at the school.

And one of the "old" ideas never caught on with the rest of the investment world. The Efficient Markets Theory.

I truly believe in this theory especially nowadays with all the information within our fingertips.

Mark4124 · Answer

I completely disagree that the efficent markets theory is not accepted. Many believe in the efficent market's theory. It is the basis for books like "A Random Walk on Wall St." and the basis for passive/index strategies. My friend works for AARP-Financial... they base their whole company on the efficent market premise.

3underscore · Answer

Well, it is good to believe in the EMH. But you can never really prove it as empirical data cannot show the flows properly.

Its more of a cognitive theory that makes sense, than something you could ever contemplate writing a proof on.

Mark4124 · Answer

Oh... I don't believe in Efficent Market theory myself... I want to be an investment manager

Active management is pretty much EMH hersay. But plenty of people do. Thats what all those damn index funds are all about.

gmatclb · Answer

Many people do believe in the efficient market theory. But if you look at the investment world as a whole, most people are active managers. I've never seen a poll, but based on observation, I would guess active managers outnumber passive managers 9-1....at best.

Almost all of the investment managers out there believe that markets are efficient to some extent. But the true believers of this theory are passive managers.

#1 for Finance... Chicago GSB or Wharton??

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