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The Nobel Prize in Economics

By the time you read this, the Nobel Prize in economics will likely have been awarded, though as I write this, the winners have yet to be announced.

A few random thoughts:

1) I guarantee you that the economist(s) who win it will be much better sports than Doris Lessing, who seemed put off that the award had disturbed her daily routine. Every economist is dying to win the Nobel.

2) There is always great uncertainty about who will win it. Partly, that is because it’s hard to say which economic contributions have been most influential. Mostly, though, it is because the committee faces a difficult dynamic optimization problem: economists are only eligible if they are alive. That pushes the committee towards awarding it to older economists who might die soon. On the other hand, the fact that they are old and haven’t won yet means that they may not be as strong a candidate as some of the younger economists. As such, there is never an obvious winner — there are always many marginal candidates — among the good very old economists and the great but not quite as old economists. Note how different this process is from the John Bates Clark Medal, where it is always pretty obvious that there are a small set of serious contenders because of the fixed age cutoff.

3) There are hundreds of economists who have their calendar cleared for the next few weeks, just in case they win. Many of these economists have no chance whatsoever of winning.

4) Both Ladbrokes and InTrade allow betting on who will win the Economics Nobel Prize. This is crazy. Nobody cares about this except economists, and hardly any economists gamble! Only a few hundred dollars were put at risk in the InTrade market. Robert Barro, Gene Fama, Paul Romer, and Peter Diamond are the favorites according to that market. Any of those would be good choices. I think Oliver Hart would be a likely choice as well. Greg Mankiw adds Martin Feldstein to the list.

Some commenters at Mankiw’s site think it will be Stephen Dubner. If Dubner wins, I hope he will let me be part of his entourage.