| Username |
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| Gandhi |
Posted
on 10-Oct-01 08:29 PM
If you are interested, the original content is found in: http://www.nobel.se/economics/laureates/2001/press.html
Press Release - The 2001 Sveriges Riksbank (Bank of Sweden) Prize in Economic Sciences in Memory of Alfred Nobel
10 October 2001
The Royal Swedish Academy of Sciences has decided to award the Bank of Sweden Prize in Economic Sciences in Memory of Alfred Nobel, 2001, jointly to
George A. Akerlof
University of California at Berkeley, USA,
A. Michael Spence
Stanford University, USA, and
Joseph E. Stiglitz
Columbia University, USA
"for their analyses of markets with asymmetric information".
Markets with asymmetric information
Many markets are characterized by asymmetric information: actors on one side of the market have much better information than those on the other. Borrowers know more than lenders about their repayment prospects, managers and boards know more than shareholders about the firm's profitability, and prospective clients know more than insurance companies about their accident risk. During the 1970s, this year's Laureates laid the foundation for a general theory of markets with asymmetric information. Applications have been abundant, ranging from traditional agricultural markets to modern financial markets. The Laureates' contributions form the core of modern information economics.
George Akerlof demonstrated how a market where sellers have more information than buyers about product quality can contract into an adverse selection of low-quality products. He also pointed out that informational problems are commonplace and important. Akerlof's pioneering contribution thus showed how asymmetric information of borrowers and lenders may explain skyrocketing borrowing rates on local Third World markets; but it also dealt with the difficulties for the elderly to find individual medical insurance and with labour-market discrimination of minorities.
Michael Spence identified an important form of adjustment by individual market participants, where the better informed take costly actions in an attempt to improve on their market outcome by credibly transmitting information to the poorly informed. Spence showed when such signaling will actually work. While his own research emphasized education as a productivity signal in job markets, subsequent research has suggested many other applications, e.g., how firms may use dividends to signal their profitability to agents in the stock market.
Joseph Stiglitz clarified the opposite type of market adjustment, where poorly informed agents extract information from the better informed, such as the screening performed by insurance companies dividing customers into risk classes by offering a menu of contracts where higher deductibles can be exchanged for significantly lower premiums. In a number of contributions about different markets, Stiglitz has shown that asymmetric information can provide the key to understanding many observed market phenomena, including unemployment and credit rationing.
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George A. Akerlof, 61 years, born 1940 in New Haven, Connecticut (US citizen). PhD from MIT 1966. Has held professorships at Indian Statistical Institute and London School of Economics. Since 1980 Goldman Professor of Economics at the University of California at Berkeley.
http://emlab.berkeley.edu/users/akerlof/index.html
A. Michael Spence, 58 years, born 1943 in Montclair, New Jersey (US citizen). PhD from Harvard 1972. Has held professorships at Harvard and the Graduate School of Business, Stanford and has also been Dean at both these universities.
http://gobi.stanford.edu/facultybios/bio.asp?ID=156
Joseph E. Stiglitz, 58 years, born 1943 in Gary, Indiana (US citizen). PhD from MIT 1967. Has held professorships at Yale, Princeton, Oxford and Stanford, and has been the Chief Economist of the World Bank. Since this year, Professor of Economics, Business and International Affairs at Columbia University.
The Prize amount:
SEK 10 million, will be shared equally among the Laureates
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| ashu |
Posted
on 11-Oct-01 07:06 AM
>George A. Akerlof
>University of California at Berkeley, USA,
>A. Michael Spence
>Stanford University, USA, and
>
>Joseph E. Stiglitz
>Columbia University, USA
>"for their analyses of markets with
>asymmetric information".
Great choices, all!!
What I find interesting is that now, like in physics and chemistry, one can
also win a Nobel in economics for one pathbreaking insight (expressed in one essay, as in Spence's case here).
Spence, a former Dean at Harvard, is no longer a Stanford professor, but a partner at a venture capital firm . . . Ah, to be rich and smart!!
Stiglitz, who is famous for his sense of humor, is a darling of many economic-reformers in the Third World. I admire his balancing solidly rigorous academic economics with practical real-world concerns. His essays have been republished
in Kathmandu in The Nepali Times.
Akerlof's "lemon" essay --for which he is famous and for which he has won the award -- was initially thought up when he was in India . . . at least that's what I read in a book about the Delhi School of Economics a few years ago.
To respond to a thought in another thread:
(Unlike what Biswo thinks, academic economics does NOT capture the public imagination the way authors [of popular or classic literature] such as Jhumpa Lahiri or Laxmi Prasad Devkota or William Shakespeare do. And, as such, it's perfectly
all right if few people outside of economics had ever heard of Akerlof or of Spence or, for that matter of Stiglitz.)
To continue, and to apply Spence's Nobel Prize winning theory here:
Akerlof was and is highly regarded by his PROFESSIONAL peers.
How do we know this?
Because his professional peers SIGNAL their respect for him by citing
Akerlof's research in their own works.
And before continuing, let me say that I am defending here an IDEA and not Samrat the person . . .
Samrat's professional peers such as writer Amitav Ghosh and others have risked their reputation to say good words about his book.
I am NOT a writer myself, but a few good words from Amitav Ghosh, a writer who has a solid reputation, on the cover of Samrat's book and other favorable reviews from OTHER LITERARY peers in the form of reviews/criticisms and so on SIGNAL to me -- a reader -- that Samrat's work must be good.
If not, why else would these professional peers risking their reputation to sing praises of Samrat?
If Samrat needs to "go a long way", I'd rather Amitav Ghosh or someone like him tells that to Samrat, and NOT Biswo Poudel or Ashutosh Tiwari. After all, what
does "going a long way" mean here? Until Biswo is satisfied with Samrat's writing? Until Samrat wins a Pulitzer?
And so, Biswo Poudel and Ashutosh Tiwari do their best as readers who may like/dislike Samrat's stories and give reasons as to why they like/dislike the
stories,
Samrat may be a fellow Nepali -- and we are all eager to offer advice to a fellow Nepali by saying "oh, you have a long way to go" andso on.
But when we do that, we FAIL to put him in the universe of professional writers, and have faith that that peer-to-peer universe will be the BEST JUDGE of his writing talents.
(For example, I -- a non- CS person -- don't dare tell Biswo how far he should go with his computer science program. I TRUST Biswo's PROFESSIONAL peers to
decide that for him. Now, why can't similar reasoning be accorded in Samrat's
case too?)
I hope the idea I am trying to defend is clear.
oohi
ashu
ktm,nepal
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| Riti |
Posted
on 18-Oct-01 03:29 PM
Dear Gandhi-ji, Ashu-ji or anyone else who may be able to help:
I am interested in finding a book that details all the past winners of the Nobel Prize in Economics and their research. The Economist used to put out something similar but I haven't seen it recently... Perhaps you know of such a book. I've found websites listing the winners for each year but I'm more interested in learning (fairly in-depth) about each person's research contribution.
I think it would be an interesting read, don't you?
Thank you,
Riti
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