I got it; you want it. How much I want depends on how much you're willing to pay.
Gimme the Nobel Prize; for common sense......
Posted on 10/15/2007 3:20:13 PM PDT by bruinbirdman
Three US economists who established and developed theories governing how trade between two individuals or companies takes place and how it can be optimised have won the Nobel prize for economics.
The Royal Swedish Acadamy of Sciences announced on Monday that Leonid Hurwicz, Eric Maskin and Roger Myerson would share the 2007 Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel for “for having laid the foundations of mechanism design”.
Mechanism design theory was initiated by Professor Hurwicz in the early 1960s and developed separately by professors Maskin and Myerson in the 1970s and 1980s.
The economists will share a prize of SKr10m ($1.57m).
One of the basic problems in economics is that markets are remarkably efficient, but they work best only under rather extreme assumptions. If information held by buyers or sellers is private - for example how much someone is really willing to pay for something - trade can break down.
One example of the sort of problems mechanism design theory can analyse occurs regularly, when buyers and sellers lie about their true motives and economics.
A company might say it is only willing to provide a service for $200 when, in fact it will make a profit if it charged $150. Another might say it is only willing to buy at $100 when it is really willing to pay up to $170.
In this example, trade is certainly possible between the range of $150 and $170, but might not happen because both the buyer and the seller have an incentive to misrepresent their true positions.
Professor Hurwicz, Russian-born but a US citizen and now 90, introduced to economics the important notion of “incentive compatibility” in 1972 which proved central to later developments, both theoretical and practical.
One of the most important practical areas it has been used is in economic regulation of industry, where companies have huge incentives not to reveal their private costs or information.
The theoretical work has led to more effective regulatory concepts, such as the design of auctions that give the parties an incentive to reveal their private information, enabling everyone to benefit. Professor Myerson’s 1981 paper “Optimal auction design” was a seminal work in this field.
Similarly, the regulation of subscription television has benefited from the theoretical work of mechanism design in specifying when the bundling of channels in a packaged is in consumers’ interests.
The theory provides economists with a general tool-kit to analyse different market structures and has wider applications in social science with its use in helping to design voting systems.
One of its uses for the future will come in environmental theory and policy, areas in which professor Maskin has been active this decade, where the mechanism of and domestic and international regulation will be crucial for its success in preventing global warming and other environmental degradation.
I got it; you want it. How much I want depends on how much you're willing to pay.
Gimme the Nobel Prize; for common sense......
I guess you can't get a Nobel nowadays unless your work has some connection to preventing 'global warming.'
or, as an academic might put it:
Mechanism design
From Wikipedia,
Mechanism design is a sub-field of economics. It is the art of designing rules of a game to achieve a specific outcome. This is done by setting up a structure in which each player has an incentive to behave as the designer intends. The game is then said to implement the desired outcome. The strength of such a result depends on the solution concept used in the game. See also contract theory.
Mechanism designers commonly try to achieve the following basic outcomes: truthfulness, individual rationality, budget balance, and social welfare. More advanced mechanisms attempt to resist harmful coalitions of players.
Most of the results in mechanism design have been established by economists, but some mathematicians, computer scientists and electrical engineers also work in the field.
One branch of mechanism design is the creation of markets, auctions, and combinatorial auctions. Another is the design of matching algorithms such as the one used to pair medical school graduates with internships. A third application is to the provison of public goods, and the optimal design of taxation schemes by governments.
A common exercise in mechanism design is to achieve the desired outcome according to a specific solution concept. The celebrated Gibbard-Satterthwaite theorem shows that any outcome that can be implemented as a dominant strategy equilibrium is necessarily dictatorial. This is similar to Arrow's Impossibility Theorem. By contrast, implementation in Nash equilibrium is possible for a much wider range of social choice rules.
The 2007 Nobel Prize in Economics was awarded to Leonid Hurwicz, Eric Maskin and Roger Myerson "for having laid the foundations of mechanism design theory".
yitbos
This could all be solved if these guys came over to my place for a serious game of high stakes poker.
Another prize, another neo-communist.
.... Similarly, the regulation of subscription television has benefited from the theoretical work of mechanism design in specifying when the bundling of channels in a packaged is in consumers’ interests.
The theory provides economists with a general tool-kit to analyse different market structures and has wider applications in social science with its use in helping to design voting systems.
One of its uses for the future will come in environmental theory and policy, areas in which professor Maskin has been active this decade, where the mechanism of and domestic and international regulation will be crucial for its success in preventing global warming and other environmental degradation
Ah a Nobel Prize for those who figured out how the government can efficiently regulate the free market, and whose work will be used for the government to efficiently regulate carbon credits. Brilliant.
The duped believe this has some bearing on Global Warming, where, if fact, you need only follow the money.
Left out, as usual, is how AlGore is CEO of a major player in the Carbon Trading Markets.
The bottom line, as always, as your earnings will be headed to someone else's pockets, one way or another. To Liberals, that's okay as long as THEY are the ones who decides which are the receiving pockets, and THEY get the credit and the votes.
Leonid Hurwicz, Eric Maskin and Roger Myerson
All these men have what in common?
ANSWER
All three are Jewish so score one for the Tribe>. Any Muslims besides AlGore win this year?
Now all three of these Jewish fellows live in America which is the best nation for Jews to live in besides Israel
Carbon credits are real cheap on eBay. AlGore should be buying his there.
When is Ben&Jerry’s gonna name an ice cream for AlGore?
“When is Ben&Jerry’s gonna name an ice cream for AlGore?”
Well icecream already has one for the democratic party. Its call Rocky Road.
How the heck can this: markets are remarkably efficient be described as a PROBLEM. Beyond stupid. I suppose it's a problem when you want to tax the U.S.A. to death. Apparently DOGMA is all that matters for these awards.
Nah, a new twist on good ol' social engineering will get you one, too.
Wow. That's got to be the most obvious question of the year. Except, I don't think Ben and Jerry's matters to anyone anymore does it (do they)? Rather a bit of yesterday's news, I thought.
On the other hand, savvy players of public sentiment that they are, they probably want to distance themselves from The Beached Whale.
And Myerson is yet ANOTHER laurete from the University of Chicago. Score ANOTHER one for my alma mater!
A company might say it is only willing to provide a service for $200 when, in fact it will make a profit if it charged $150. Another might say it is only willing to buy at $100 when it is really willing to pay up to $170.
In this example, trade is certainly possible between the range of $150 and $170, but might not happen because both the buyer and the seller have an incentive to misrepresent their true positions.
Terrible problem that must be solved by government regulation. Of course, if either party to the trade really wanted to make that trade happen, it would happen. Markets tend to work that way. Regulators forcing each party to reveal each and every desire and motivation actually perverts the market IMO. Love how the article cites these folks' theory being used to regulate cable television bundling! That worked out well, didn't it? That's the reason I have to pay for 30 channels I never watch in order to get Fox News.
TootyFatty??
Markets are efficient.
Economics is not a science. What discipline should "economics" fall under? Sociology? Also not a science. Political science? Also not a science. School of Business Administration?
I think it stands alone in the School of Liberal Arts.
yitbos
So this means 6 US prizes this year, 5 for the rest of the world, and 1 for an international organization. Not bad. This is consistent with our overall percentage of about 40% of the prizes and a post WWII percentage of about 50% of the prizes.
Still, we are falling behind in Literature. The Brits have won 5 Literature Prizes in the last 26 years (half of their prizes) and 3 in this decade alone! One more and they will be equal with us (with half the population). Though I guess this is OK since we haven’t had at least one American win the Nobel Prize in Economics only 7 times in the last 26 years and have won 67% of the overall Economics Prizes—it probably has something to do with living in a country that doesn’t think economics is a ‘dirty’ science.
It is closer to applied math than the examples you gave. Also, I consider sociology a science, but not one that is as rigorous as physics (though there is no other science that can fall within 5 to 10 orders of magnitude of the precision of some physical theories like QED or general relativity--only 'physical' chemistry comes close).
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