Prize for guessing

From Robert C. Merton’s and Myron S. Scholes’ methods to determining the value of derivatives 10 years ago, through Amartya Sen’s welfare economics in 1998 and Daniel Kahneman’s integrated insights from psychological research into economic science in 2002, it seems the Nobel Prize for Economics has gone back six years to 2001, when three economists George A. Akerlof, A. Michael Spence and Joseph E. Stiglitz got the award “for their analyses of markets with asymmetric information”.
Technically called ‘The Sveriges Riksbank Prize in Economic Sciences’, the troika that has won this year’s prize — Leonid Hurwicz of the University of Minnesota (and at 90 the oldest to get a Nobel); Eric S. Maskin, 57, of Institute for Advanced Study, Princeton; and Roger B. Myerson, 56, of University of Chicago — has got it for “having laid the foundations of mechanism design theory”. In English, for marrying asymmetric information with institutional design.

Opinion in The Indian Express, October 16, 2007