Information, Risk and Operations Management Ph.D. student Huaxia Rui has spent the past four years researching two apparently disparate topics: the business impact of social media and the understanding of securitization. And now the Powers Fellowship will enable Huaxia to focus his last year on bringing together the results of his research.
Acknowledging the significance of social networking in today’s business environment, Huaxia has researched the power of Twitter messages and their effect on the sales of movie tickets. Part of his research was creating a software program to aggregate and “read” relevant Tweets, so that they can be analyzed using econometric methods. The result? He has found major implications for the sales and predictions of future sales of the discussed movies.
His research also considers the complicated process of securitization, the practice of pooling various types of debt with the goal of selling the debt to investors, a factor at the core of the recent global financial crisis. The research has provided a unique algorithm that computes the optimal security structure, and proposes that securitization can increase social welfare. “The securitization project offers direct suggestions to the finance industry on how to develop better contracts and security products so that financial crisis will be prevented to a certain extent,” he said.
Since embarking on this research, Huaxia has seen the project evolve as it overcame its inherent problems. “How can you make a program understand what people really mean? It’s very challenging,” he said. But with the help of a computer science course and suggestions from Professor Jason Baldridge at the department of linguistics, he has enabled his research’s validity. Regarding the securitization research, Huaxia said, “We had to find the optimal solution for a very complicated problem which is very non-traditional. We developed a way of calculating that and the algorithm eventually worked.”
His advisors, UT’s Andrew Whinston and EPFL’s (Switzerland) Semyon Malamud, have helped make Huaxia’s research goals a reality. Whinston’s world-famous research in the MIS program drew Huaxia to study at UT. “I had a background in engineering, but I am very interested in the economic impact, especially computation,” added Huaxia, “UT was a natural choice.”
The Powers Fellowship will allow Huaxia to concentrate on completing his last year of research. “I can be more focused. With the fellowship, I don’t have to lose my focus. Also, I can have more opportunities to travel to meet with my coauthors and get research done at a faster pace,” he said.
After he completes his research and graduates, Huaxia hopes to publish his findings on a self-established website, and to present a system that offers practical implications. “When businesses are better equipped with tools to understand consumer demand, people have more power over what they want.”
Huaxia has found his time at UT as a doctoral student to be “very satisfying.” He added, “You satisfy curiosity and think about problems that are really related to our world. Honestly, that is very important. You have to come up with innovative ways to deal with those problems, which is rewarding.”
And that is what he has done - identified problems and found innovative ways to solve them. Huaxia eventually intends to look for faculty positions in North America or Asia. “The research that I’ve done here is important, it’s the foundation of my future research,” he said.
He credits the training and methodology acquired at UT for future success. “As the world keeps changing,” he said, “there will be new problems, new inventions, and I think these new things will grab my attention. We should always keep an eye on what’s happening in the world and what we can do to make it better.”