Chicago Economist Roger Myerson One of Three to Win Nobel

I was delighted to wake up this morning and discover that I have yet another Nobel Laureate as a colleague.

Congratulations to Roger Myerson! (And also to Eric Maskin and Leo Hurwicz, who shared the prize.)

The prize was “for having laid the foundations of mechanism design theory.” Mechanism design formalizes ways of thinking about how a social planner, manager, or parent can set up rules so that all parties involved have the incentives to act in the way that the planner/manager/parent prefers. This Nobel is not for the idea that you can design incentives this way, but rather for coming up with ingenious proofs that simplify the task of proving that, indeed, all parties have the right incentives — a task that can turn out to be awfully difficult.

In addition to being great economists (see my last post about what it means if you win the Nobel when you are young — both Maskin and Myerson are under 60 years old), they are both incredibly kind and generous people. In fact, they may challenge George Akerlof for the title of nicest people to win the Economics Nobel.

I don’t know Hurwicz personally. I’m embarrassed to say I don’t even know his research, for that matter. He must be at least 90 years old.


Dr. Levitt: do you think it would be possible for Celso Furtado, a Brazilian economist, to ever get the Nobel? Or developing world people are fated to get only Peace Nobel? Thanks!

A E Pfeiffer

Filipe, the Indian economist Amartya Sen won it in 1998. Doesn't he count?

random human

Too bad "thinking about how a social planner, manager, or parent can set up rules so that all parties involved have the incentives to act in the way that the planner/manager/parent prefers" via game theory still remains (and likely will remain for a long time) an abstract concept to most individuals/organizations.

Love live innumeracy.


Thanks for blogging on this. I attended Hurwicz's class on Welfare Economics last year. He has been in numerous short lists for the award for a number of years. It's great that he finally received it. Congratulations to Myerson and Maskin too.


Why does everyone call the Economics Nobel a Nobel Prize? It's not! It's an award from a bank, and it is disgusting that economics gets an award and entire fields of hard science do not. E.g. microbiology, which is tremendously important, does not receive its own award, so it is instead lumped in with medicine most years.

jeff urban

Thanks for blogging on this, Prof. Levitt! It's excellent to have someone in the field discuss the Nobel laureates' contributions in greater depth than the press release...

Real Scientist

I agree with David. The bank that awards this is parasitically linking themselves with real scientists. Economic science is an oxymoron. If it were a science, its results would be truly predictive. How can you slap robust mathematical models on the random brain farts of the little-educated typical consumer? Heck, economists can't even agree on a usable definition of "money supply"!


David, "everyone" calls it a Nobel prize largely because that's how the media reports it. I think most people know it was not one of the original prizes. I'm not sure why it matters one way or the other.

I'm sorry you feel it is "disgusting" that economics, of which greater understanding has helped to raise standards of living for billions, has its own prize while microbiology does not. I disagree with that assessment.

An Interested Observer

Charles, economics can be every bit as predictive as quantum electrodynamics -- there are just far more moving parts for which probabilities must be calcualted. All those "random brain farts" aggregate; that is why collective action can be different from the sum of its parts.


Amartya Sen winning in 1998 was a fluke. I agree with Felipe, when it comes to the Nobel Prize in economics the winners are 99.98% likely to be from Europe or America and 0.01% likely to be from Israel when the voters have had too much to drink before voting.

The winning theory have to be very complex and have to be of no use to anyone except, like, 20 people on Wall Street and the Federal Reserve Bank. And the theory has to be an idea that is simple but was complicated with algoriths and equations to drive school students crazy. Complex enough to drive students insane gets bonus points.

"Mechanism design formalizes ways of thinking about how a social planner, manager, or parent can set up rules so that all parties involved have the incentives to act in the way that the planner/manager/parent prefers."

I think there was a chapter in 7 Habits of Highly Effective People that dealt with this subject. It may not have been that specific book, but I read somewhere a chapter about getting what you want from people without really trying somewhere and did sound so way less complicated.

The Nobel Prize in Economics is a prize for the economist who can take simplest idea(s) and really, really it. And it doesn't hurt for them to be nice people either.

There should be a Nobel prize awarded to the man/woman who can take a really complex idea and make it so simple a toddler could understand it. But that may be asking too much.


Craig B.

I would love to know of a specific example of how mechanism design theory can apply to parents. The never-ending parent/child negotiations are so rich and volatile, it's always interesting to hear how different theorists can approach them.

P. Raja

Congratulations for winning Nobel prize for economics. Will there be a day economics prize awarded to Asians?


P. Raja, as already noted, Amartya Sen has won it already.

jeff urban

Dear Mr./Mrs. Interested Observer,

As a scientist who has a close friend who works in the field of economics, I think you are either deluded or misinformed in comparing the predictive validity of economics and QED. I would love for you to provide some factual evidence or references to back your erroneous statement up.

To say that something "is predictive", but has "more variables than we can account for" is inherently contradictory.

Jeff Nardine

Post #7 states: "Economic science is an oxymoron. If it were a science, its results would be truly predictive."
Following that logic how would you classify quantum physics? Or questions like Schrodinger's thought problem about the cat sealed in a box with a radio isotope - is it alive or dead?


Everytime someone wins the Nobel Peace Prize the winner (and the prize and its organizers) are branded left wing socialists. Just listen to talk radio over the last few days to know what I'm talking about. However, the economists are never branded this way. I'd like to know why.


Matthew Rose / Paris, France / Lalande Digital Art Press

Real Scientist

Economic "science" is not responsible for a better quality of life - government regulation of runaway greed is, at least pertaining to economics.

I would classify quantum physics as a model with an established track record of predictive success, and Schroedinger's cat as a thought experiment, not a model. Having a "model" with "more variables than we can account for" is not a model. It's a curve fit.

The whole basis of the annoyance is this - why did they slap the name Nobel on it and award it on the anniversary of his death? Because they wanted the reflected glory. If they wanted to make a respected economic "science" award, fine. Name it after the bank or benefactor. Nobel didn't have an award for it in his will because he did think it was needed, presumably. If the field developed after his death, fine, make an award, but what justifies pinning it to his name and letting the media shine it up with crappy, incomplete reporting? Doing what they did was parasitic, pure and simple.


max ferrari

Celso Furtado died in 2004 and, even if a candidate, did not make it to Nobel.
Other giants did not win: Joan Robinson, Niki Kaldor, Piero Sraffa of the Cambridge (UK) school.
Other economists that have shown, together with Robinson, Kaldor and Sraffa, the fallacies of mainstream economics (either neoclassical or marginalist) and have proposed a different approach to the study of political economy deserve the prize: Luigi Pasinetti and Pierangelo Garegnani, just to cite two of them.

Alexander Parisky

The "Nobel Prize" in economics will never be thought of as highly in academic circles as real Nobel Prize. I am a student at UC Berkeley, and we have an area of campus with 6-7 "NL" (nobel laureate) parking spaces. They added one for Smoot last year. I highly doubt that an economist on the faculty would get one of those spots if they won.

granted, that isn't even a relatively important distinction by itself, but it is illustrative of the greater differences. I seriously doubt that john q. public would know that the econ prize isn't really from the Nobel foundation. As a biology student, it upsets me that such a descriptive field with so little predictive success gets so much attention. People know that peace prize winners aren't scientists, but I think the prize confers more clout to economics than it should.

media, please at least refer to the distinction when talking about these prizes! it's only once a year!



I want to echo Craig B.'s request above: PLEASE delve into how mechanism design theory applies to parenting! All of us parents who love economics but don't have the time to spend reading complicated theories would really appreciate it!