Tom Schelling and Robert Aumann have been awarded this year’s Bank of Sweden Memorial Prize. Tyler Cowen at Marginal Revolution provides some information about both of them (“Schelling”:http://www.marginalrevolution.com/marginalrevolution/2005/10/schelling_and_a_1.html, “Aumann”:http://www.marginalrevolution.com/marginalrevolution/2005/10/robert_aumann_n.html). Schelling’s work is probably the better known of the two outside of economics, because in addition to being excellent it’s very readable. I use a chunk of his classic “Micromotives and Macrobehavior”:http://www.amazon.com/exec/obidos/ASIN/0393090094/kieranhealysw-20/ref=nosim/ in my undergraduate social theory class, for instance. We read a bit of _The Wealth of Nations_ and then we read some Schelling, partly in order to get across the idea that co-ordination can be disaggregated and bottom-up process, and partly to see that markets are also a special case of a bigger class of co-ordination problems.
From an outsider’s perspective, and speculating a bit on the politics of it all, the result seems like an interestingly balanced way to mark the rise of game theory in economics. While Schelling’s work is analytically acute (and the man himself is famously sharp in discussion), it is not presented in a technical mode. You can sit down and read the essays. Aumann, on the other hand, represents a much more mathematized wing of the field, proving theorems and developing new conceptual tools with precise formal properties. So, for instance, while Schelling can write essays like “Strategic Relationships in Dying” and “The Mind as a Consuming Organ”, Aumann’s papers have titles like “The Bargaining Set for Cooperative Games” and “Subjectivity and Correlation in Randomized Strategies.” The prize committee has seemed to make these kind of balanced choices on other dimensions before, sometimes in consecutive years (Merton and Scholes followed by Sen) sometimes in the same year (Kahneman and Vern Smith).
On a side note, I’m not surprised to “learn from Tyler”:http://www.marginalrevolution.com/marginalrevolution/2005/10/schelling_and_a_1.html that Schelling was his mentor. You can see it in the way he thinks about problems.
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Lister 10.10.05 at 9:12 am
At least it didn’t go to Bono.
Or, for that matter, Jeffrey Sachs.
Daniel 10.10.05 at 10:17 am
I have to say that since this is the prize for economics, not political science or anything else, this is rather like seeing the prize for Biology shared between William Hamilton and Steven Pinker.
Kieran Healy 10.10.05 at 10:24 am
I have to say that since this is the prize for economics, not political science or anything else
The prize has been oscillating on _that_ dimension, too: for the past two years we’ve had mainstream economists (Kydland and Prescott last year; Engle and Granger before that), and then before them two years of more maverick types (Kahneman & Smith, Akerlof, Spence & Stiglitz).
Daniel 10.10.05 at 10:36 am
oooh I dunno. Of those names, Kahneman and Smith are the only ones who could really be called “outside the mainstream”. I’d also question the Sen example above; he wrote a lot of technical stuff on welfare economics which ranges between “very good” and “excellent”. I can’t think of any recent winner who’s contributed as little as Schelling to economics as a discipline and surely now the last figleaf of an excuse for not giving Galbraith one is removed.
RedWolf 10.10.05 at 10:43 am
Aumann was a joy as a teacher. He is one of the sharpest and brightest people I have encountered. As an undergraduate in his class 30 years ago, he seemed humble, polite and no one could catch him making a mistake even in the most complicated proofs; many, some now very famous, students tried very hard with no avail.
Robin 10.10.05 at 11:14 am
“[S]urely now the last figleaf of an excuse for not giving Galbraith one is removed.”
I don’t know how much contribution alone dictates the prize. Joan Robinson’s failure to win one doesn’t appear to have been a result of lacking fundamental contributions–hell, the capital controvesy lasted 30 years!
Bob B 10.10.05 at 12:04 pm
From a long conversation with her on one occasion the 1960s, I learned that Joan Robinson was deeply opposed on principle to the creation of a Nobel prize for economics because she believed some economists would compromise their work in order to try to win the prize.
This was hardly a unique personal insight imparted to me for she made little secret of this view as far as I could gather. There is probably little doubt that she would have refused the prize had it been awarded to her and very likely the prize awarding institution were aware of her views on the subject and perhaps wanted to avoid mutual embarrassment.
Kieran Healy 10.10.05 at 12:18 pm
Of those names, Kahneman and Smith are the only ones who could really be called “outside the mainstreamâ€. I’d also question the Sen example above; he wrote a lot of technical stuff on welfare economics which ranges between “very good†and “excellentâ€.
I don’t think that all the variables are being balanced all the time, just that when someone wins for being really well known for x, it seems to get balanced out later (or the same year). So Kahneman is known for experimental work on the failings of the rat choice model, but Smith for experimental work on its successes. Merton and Scholes are big-time financial markets people, Sen is all about welfare, and so on.
Robin 10.10.05 at 2:11 pm
“Joan Robinson was deeply opposed on principle to the creation of a Nobel prize for economics.”
Well, maybe it’s time we reconsider her argument.
anon 10.10.05 at 4:53 pm
Have any women won the econ prize? No, I’m not making any implicit arguments that Robinson’s gender has anything to do with her being “overlooked,” or that the prize committees are biased toward men, or any other similar claim. I’m just curious … and, yes, too lazy to look it up myself.
Daniel 10.10.05 at 4:58 pm
nope never. There are, of course, even fewer women economists than engineers, rather hilariously.
Tom Slee 10.10.05 at 5:10 pm
“I don’t know how much contribution alone dictates the prize.”
I believe that it is officially, at least, nothing. That is, the prize–at least those in the sciences—is for a discovery or invention or improvement: for a single event or piece of work, not a lifetime of solid work.
In practice, I guess the distinction is sometimes difficult to make.
Bob B 10.10.05 at 5:37 pm
“Well, maybe it’s time we reconsider her argument.”
I don’t believe the 30-year controversy about capital theory is the reason why Joan Robinson deserved a Nobel award: the case depends far more on her path-breaking contributions to the development of Keynesian macroeconomics back in the 1930s and 1940s. However, by the time the Nobel prize for economics was established in 1968, there was already a daunting backlog of prospective award winners, hence the number of joint awards in the early years such as Frisch and Tinbergen, Arrow and Hicks, and von Hayek and Myrdal. The last was certainly a recognition that political theory and analysis of institutions mattered in the context of economic policy.
On the capital theory controversy, one telling item in the conversation I had, almost exactly 40 years ago, was about how Robert Solow had then recently spent a sabbatical year in Cambridge, England, without ever meeting Joan Robinson, who lived there, when Cambridge really isn’t a very large town.
But hell, why discuss a Nobel award for Joan Robinson when we should be properly celebrating the award to Aumann and Schelling for their outstanding contributions to games theory?
Daniel 10.10.05 at 6:21 pm
or more specifically, to Aummann for outstanding contributions to game theory, and Schelling for taking results from game theory and using them in other fields.
Bob B 10.10.05 at 7:18 pm
Fair enough – thanks. Now it can be told: I met with John Hicks a couple of years before I met Joan Robinson. This was when he was still completing the book that was to become: Capital and Growth, and when I was trying very hard to make sense of the thread running through Joan Robinson’s Accumulation of Capital. I mentioned my difficulty to Hicks who said he had tried to read the book and given up. I took some heart from that.
It’s perhaps what I happen to read now but I don’t get much sense that those Cambridge controversies matter much nowadays and growth accounting – which flows from Solow’s model of neo-classical growth – is widely applied. But then I don’t get an impression that neo-classical growth theory is of much use in enlightening us about economic growth in Japan during the 1990s or in Africa during the last 40 years. But I digress from games theory again.
Gray 10.12.05 at 12:30 pm
Kaplan has an interesting piece on Schelling
http://slate.msn.com/id/2127862/nav/tap2/
Roger Sweeny 10.12.05 at 6:05 pm
surely now the last figleaf of an excuse for not giving Galbraith one is removed.
All that remains is the relatively large problem that, when it comes to his big ideas, he’s pretty much been wrong.
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