Michael R. Powers

Michael Roland Powers (born November 19, 1959) is the Zurich Group Professor of Risk Mathematics at Tsinghua University’s School of Economics and Management, where he holds a dual appointment in Tsinghua's Schwarzman Scholars program. An internationally recognized insurance scholar, he was a 2011 recipient of China’s Qian Ren Ji Hua award. In 2013, he won the Kulp-Wright Book Award for Acts of God and Man: Ruminations on Risk and Insurance (2012, Columbia University Press).

Powers has published over eighty articles and book chapters on a variety of risk-related topics, with particular focus on issues of government regulation and public policy. His major research contributions include: the introduction of intertemporal discounting into collective risk theory (actuarial ruin theory); the derivation of the “Powers-Shubik square-root rule” for the approximate number of reinsurance companies operating in a national insurance market; and a utility-theoretic solution of the Two Envelopes Paradox. A frequent collaborator of Martin Shubik, he is responsible for promoting the application of game-theoretic modeling in insurance and actuarial science. In Acts of God and Man, he proposes a science of risk based upon: a fundamentalist Bayesian (i.e., subjective/judgmental) approach to modeling uncertainty; a formal distinction between the "aloof" risks of insurance and the "non-aloof" risks of other financial markets; and a personalized scientific method emphasizing randomized controlled studies, mathematical and game-theoretic modeling, and statistical simulation.

Powers was appointed Deputy Insurance Commissioner for the Commonwealth of Pennsylvania (a sub-cabinet-level post in the state government) in 1987, and subsequently was responsible for designing Pennsylvania’s current “choice” no-fault automobile insurance system. He joined the faculty of Temple University’s Fox School of Business in 1990, and moved to Tsinghua University in 2011. He succeeded Professor David Daokui Li as interim chair of Tsinghua’s finance department in 2013.

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