“for their experimental approach to alleviating global poverty.”
Michael Kremer, the Gates Professor of Developing Societies in the Department of Economics, is one of three winners of the 2019 Nobel Prize in Economic Sciences. He shares the honor with Abhijit Banerjee and Esther Duflo of MIT. The award recognizes their work on reducing the massive problem of global poverty by focusing on carefully designed, targeted experiments that would lead to specific policy initiatives.
“for contributions to contract theory.”
Oliver Hart, the Andrew E. Furer Professor of Economics, is one of two recipients of the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel. Hart shares the award with Bengt Holmstrom of the Massachusetts Institute of Technology. Hart works mainly on contract theory, the theory of the firm, corporate finance, and law and economics. His research centers on the roles that ownership structure and contractual arrangements play in the governance and boundaries of corporations. He has been at Harvard since 1993.
“for the theory of stable allocations and the practice of market design.”
Alvin E. Roth shares the 2012 Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel with Lloyd S. Shapley of the University of California, Los Angeles. Roth built on Shapley’s research to improve the design and functioning of markets, and his work matches “agents” in markets. Roth is one of the founders and designers of the New England Program for Kidney Exchange. He also helped design the high school matching system used in New York City to match approximately 90,000 students to high schools each year, and helped redesign the matching system used in Boston Public Schools. In 1998, Roth helped redesign the National Resident Matching Program to facilitate placement for couples seeking a medical residency in the same city.
Roth is the George Gund Professor of Economics and Business Administration at Harvard Business School and in the Economics Department at the Faculty of Arts and Sciences.
“For having laid the foundations of mechanism design theory.”
Eric S. Maskin is an economist and a 2007 Nobel laureate recognized (along with Leonid Hurwicz and Roger B. Myerson) “for having laid the foundations of mechanism design theory.” Among other applications, that theory has helped economists identify socially valuable trading mechanisms, regulation schemes, and voting procedures. Maskin is a Professor of Economics at Harvard. After earning his doctorate at Harvard, Maskin went to the University of Cambridge in 1976, where he was a research fellow at Jesus College, and then taught at the Massachusetts Institute of Technology (1977-84), at Harvard (1985-2000), where he was the Louis Berkman Professor of Economics, and at the Institute for Advanced Study (2000-2011), where he was the Albert O. Hirschman Professor of Social Science. Besides mechanism design, he has made contributions to game theory, political economy, and other areas of economics. He is a member of the National Academy of Sciences, a fellow of the American Academy of Arts and Sciences, the Econometric Society, the European Economic Association, and the Royal Spanish Academy of Economics and Finance, and a corresponding fellow of the British Academy. He was president of the Econometric Society in 2003 and is currently president of the Game Theory Society. He received the Centennial Medal of the Harvard Graduate School of Arts and Sciences in 2010.
“For having enhanced our understanding of conflict and cooperation through game-theory analysis.”
In 1958, Schelling was appointed professor of economics at Harvard, but he spent his first year on leave working for the RAND Corp. In 1960, Harvard University Press published what would become Schelling’s best-known work, “The Strategy of Conflict,” in which he used game theory to analyze international conflict, thereby encouraging the use of game theory throughout the social sciences. In 1969, Schelling became one of the “founding fathers” of Harvard’s John F. Kennedy School of Government. The Kennedy School annually bestows the Thomas C. Schelling Award for transformative work in public policy. Retiring from Harvard in 1990, Schelling became a professor at the University of Maryland. Schelling shared the 2005 Nobel in economics with Robert J. Aumann of Hebrew University.
“For analyses of markets with asymmetric information.”
A. Michael Spence won for economic theories based on his Harvard doctoral thesis. Markets with asymmetric information happen when people on one side have much better information than those on the other: for instance, borrowers who know more about their repayment prospects than lenders, or Nobel Prize committee members who know who the winners are before anyone else does.
When Spence chose his dissertation topic, he did it out of personal interest, not because he was trying to win prizes. In a 1984 interview with The New York Times, Spence said, “I can’t imagine people making decisions [about what to study] on the basis of how much something would contribute to their winning a Nobel Prize or a John Bates Clark Medal (which Spence won in 1981). A large amount of winning such prizes is randomness. To win a Nobel you have to be a certified genius, which I am not, or lucky, which I have been. But you can’t bet on it, so it doesn’t enter into the decision-making. You spend so much time doing this, that if you don’t enjoy what you are doing, it just wouldn’t work.”
In addition to holding a number of professorial appointments at Harvard, Spence served as dean of Harvard’s Faculty of Arts and Sciences from 1984 to 1990. He is also a former dean at Stanford University, where he is currently the Philip H. Knight Professor Emeritus. Spence shared the Nobel Prize with George A. Akerlof and Joseph E. Stiglitz.
Research on welfare economics
Three million people died in India’s 1943 Bengal famine. Witnessing it was 9-year-old Amartya Sen, who 55 years later won the Nobel Prize in Economics for his work on poverty and famine. Sen has made key contributions to the research on problems in welfare economics. Almost all of Sen’s works deal with development economics, which is often devoted to the welfare of the poor. His work has improved the theoretical foundation for comparing different distributions of society’s welfare and enhanced understanding of the economic mechanisms underlying famines.
For a new method to determine the value of derivatives
When Robert C. Merton was a graduate student in applied mathematics he had an unusual moonlighting job – he’d visit a local brokerage at 6:30 every morning and spend a few hours trading securities. Later, when he went to M.I.T. to study economics under Nobel Laureate Paul Samuelson, it struck him that his early morning activity could be placed on a scholarly footing. “I realized that what I’d been doing could be a field of economics.” And so it became. Since the 1960s, Merton has been researching the financial risk associated with derivatives, a financial instrument connected to a stock. Merton was the George Fisher Baker Professor of Business Administration from 1988 to 1998, and the John and Natty McArthur University Professor from 1998 until his retirement in 2010.
Developed the input-output analysis used in forecasting and planning the economy
Leontief’s pioneering formulas allowed economists to determine with unprecedented precision how changes in one sector of the economy impact on the performance of others. The third Harvard professor to win the Nobel in Economics in three straight years, the activist-economist joked, “Do you think there should be an anti-trust investigation?”
Contributed to the general economic equilibrium theory and welfare theory
Arrow’s work, incorporating advanced mathematical methods into economics and political science, has helped shape state economic policies around the world. A humanist as well as a “technical superscientist,” Arrow has always tried to apply his complex, abstract theory to concrete social realities, such as education, racial discrimination, medical care, and the environment. He is professor emeritus at Stanford University.
Developed the concept of using GNP as a measure of change in the nation’s economic growth
Kuznets was a major figure in the development of quantitative economic research. During World War II, his ideas were pivotal in the country’s successful transition to war production. An understated, modest man devoted to work, family, and friends, Kuznets, even in his last weeks, always greeted visitors with two questions: First, “What are you working on?” Then, “Tell me about your family.”