Predictions for the 2011 Prize in Economic Sciences (and a brief guide to nomenclature)

Today marks the final announcement of the 2011 prizes. At 13:00 CET we will discover who will receive this year’s Economics Prize, or to give it its full name, the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel. (Trying to say the full prize name in a live broadcast while pronouncing the words “Sveriges Riksbank” in a manner that didn’t sound like a strangled, demented cat to Swedish ears presented a far tougher challenge to my Anglo-Saxon-trained tongue than interviewing any Nobel Laureate. Needless to say, I usually failed.)

As you may know, this isn’t one of the original prizes that was listed in Alfred Nobel’s will. In 1968, Sveriges Riksbank (the Swedish royal bank) marked its 300th anniversary by instituting a new award through a financial donation to the Nobel Foundation in perpetuity. The first prize was awarded in 1969 to Ragnar Frisch and Jan Tinbergen for their pioneering work that integrated economic theory with statistical methods. Only one woman has been awarded the prize so far, Elinor Ostrom in 2009.

Though not considered to be an official prize, the Prize in Economic Sciences is awarded by the Royal Swedish Academy of Sciences (who are also responsible for the Physics and Chemistry Prizes), under the same nomination and selection principles as for the original Nobel Prizes. The Laureates travel to Stockholm in early December to give lectures, they receive their prizes on the same stage as the Physics, Medicine, Chemistry and Literature Laureates, and they enjoy the same once-in-a-lifetime experience at the Nobel Banquet. No surprise, then, that the prizes are often mistakenly named as the Nobel Prize in Economics, even by many of the Laureates themselves, it has to be said.

So for the pedants among you, here’s a quick nomenclature guide for anyone writing about today’s prize announcement.  According to the Nobel Foundation style manual, the correct designations of this prize are: “Economics Prize”; “Prize in Economic Sciences; or “Economic Sciences Prize”. Correct designations of the recipients are: “Economic Sciences Laureate(s)”, “Laureate in Economic Sciences”, “Laureate in Economics”, or “Economics Laureate”. (So, incidentally, is “recipient of the Sveriges Riksbank Prize in Economics in Memory of Alfred Nobel”, if you happen to have a few hundred words to spare).

Complete no-no’s are “Nobel Prize in Economics”, as I wrote earlier, or “Nobel Economics Laureate”.  While we are on the topic, another, more general, no-no is the ubiquitous phrase “Nobel Prize winner”. Like the Academy Awards, people don’t win a Nobel Prize, they are awarded it or receive it.

Which brings me back nicely to the subject of who will get the prize this year. Thomson Reuters’ picks based on the citation impact of published research include: Douglas Diamond at the University of Chicago for his analysis of financial intermediation and monitoring; Jerry Hausman at MIT and Hal White Jr. at University of California, San Diego for their contributions to econometrics, specifically the Hausman specification test and the White standard errors test; and 
Anne Krueger at Johns Hopkins University and Gordon Tullock at George Mason University for their description of rent-seeking behavior and its implications. Full marks to anyone who understood more than a single word of that.

Academics from the Kellogg School and Northwestern University’s economics department have selected their favorites for the prize, and Diamond and Hausman also feature high up their list. Topping the list, though, is Jean Tirole at the Industrial Economic Institute in Toulouse, France, whose work focuses on game theory and industrial organization, but who could be a timely choice for his work on on financial regulation and financial crises. Next on the list is Paul Romer at the Stanford Institute for Economic Policy Research for his research on how technological change affects economies, specifically shifts in worker productivity. Given that the Kellogg/Northwestern team guessed the prize correctly last year, this year’s picks must be worth a look.

Over at The Economist’s Free Exchange blog, the money is on the behavioural game theorists Colin Camerer at CalTech and Vincent Crawford. The blog also adds the juicy tale that Crawford is rumoured to have moved from University of California, San Diego to Oxford University two years ago because he didn’t want to be woken up too early on the morning when the Economics Prize Committee called. Let’s see if this supposed wish is fulfilled this year.

Harvard University usually runs a pool for the prize, and the Wall Street Journal reports that its very own Al Roth received the most bets for his work on game theory. As the WSJ says, Roth helped design, among other things, the systems for matching kidney donors with patients and New York City students with schools.

However, the Harvard pool site is currently showing the message that they have been advised by the University “to immediately shut down the Nobel pool due to legal reasons”. If anyone knows more about this, please drop me a line in the comments below.


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