The 2005 Nobel Prize for Economics

October 10, 2005 7:53 AM

The 2005 Nobel Prize for economics goes to Robert J. Aumann and Thomas C. Schelling. Marginal Revolution has a wonderful set of posts that link to various related resources, like a summary of Aumann's work or Schelling's views on global warming.
posted by daksya (17 comments total)

The Nobel Prize for economics isn't really a Nobel Prize.
posted by StickyCarpet at 8:04 AM on October 10, 2005

Interesting, StickyCarpet. And people act like corporate branding is a new thing — its real name is the "Bank of Sweden Prize in Economic Sciences, in memory of Alfred Nobel."
posted by smackfu at 8:12 AM on October 10, 2005

Well, it's considered a peer to the 'authentic' Nobel Prizes, even according to the official Nobel Prize site. There was this nutty guy in Calcutta who organized a press conference, when Amartya Sen won the prize in 98, to clarify that the Economics Prize wasn't really a Nobel Prize. He just wanted to "clear up the misunderstanding". I don't think anyone figured out his motivation. Probably jealousy and resentment.
posted by daksya at 8:23 AM on October 10, 2005

daksya: Yes, it's officially sort-of-peer, but unofficially not really. There is plenty of people - even within the Nobel Committee - who think it was a mistake to let the economists in on the prize.
posted by springload at 8:59 AM on October 10, 2005

Wow, the long Aumann interview [pdf] linked at Marginal Revolution is fascinating. It's been ages since I studied economics and game theory, but the interview is great, a clear presentation of a wide range of ideas.

Aumann seems alternately brilliant and maddening, but mostly brilliant - although the brief snippet near the end extrapolating game theory into a set of specific negotiations between Syria and Israel is exactly the kind of simplistic analysis that keeps me at arm's length from most hardcore game theorists. It was probably a tossed-off comment, though, and the rest of what I've read is a lot better, like this at the end:

H: Would you like to say something about the ethical neutrality of game theory?

A: Ethical neutrality means that game theorists don’t necessarily advocate carrying out the normative prescriptions of game theory. Game theory is about selfishness. Just like I suggested studying war, game theory studies selfishness. Obviously, studying war is not the same as advocating war; similarly, studying selfishness is not the same as advocating selfishness. Bacteriologists do not advocate disease, they study it. Game theory says nothing about whether the “rational” way is morally or ethically right. It just says what rational— self-interested— entities will do; not what they “should” do, ethically speaking. If we want a better world, we had better pay attention to where rational incentives lead.

A useful thought to keep in mind while reading the other guy's unsentimental - and somewhat unsettling - take on the uncertain economics of global warming.
posted by mediareport at 9:23 AM on October 10, 2005

The focus on "ethics" is interesting, and revealing. Notice how he avoids discussing whether actors actually are rational in the ways that Game Theory presupposes.
posted by lodurr at 11:02 AM on October 10, 2005

"There is plenty of people - even within the Nobel Committee - who think it was a mistake to let the economists in on the prize."

And why exactly are we supposed to pay attention to these snooty types turning up their noses at the upstarts who've moved in next door?

It's pure foolishness to say the Economics prize isn't a "real" Nobel just because Alfred Nobel didn't include the subject in his original list. The contributions made by the likes of Hayek and Sen to the betterment of human life are at least as great as anything ever done by ineffectual globe-trotting do-gooders such as Jimmy Carter and Mohamed ElBaradei, so by that standard the Economics prize is certainly in keeping with Nobel's original intentions; what is more, the criteria used are far more objective than those employed to select the winners for the Peace and Literature prizes.

People who carp about the Economics prize as not "really a Nobel Prize" usually turn out to be embittered lefties angry that the winners of the prize are almost always figures with insights to offer they happen to find ideologically disagreable. The Economics prize is every bit as exclusive as the others, and the prestige attached to it at least as thoroughly deserved as that given to those other two members of the stable usually bestowed on people who like to bash "capitalism" in their free time.
posted by Goedel at 12:01 PM on October 10, 2005

People who carp about the Economics prize as not "really a Nobel Prize" usually turn out to be embittered lefties angry that the winners of the prize are almost always figures with insights to offer they happen to find ideologically disagreable.

But... but... Jed Bartlet won that prize!
posted by flashboy at 12:12 PM on October 10, 2005

Notice how he avoids discussing whether actors actually are rational in the ways that Game Theory presupposes.

I don't think that's fair; the article I linked demonstrates Aumann's nuanced understanding of the issues involved with "rational" actors in game theory. If anyone's been working to make game theory more able to handle real-life actors, it would appear to be him. Still, his work is new to me, so I'll stop now.
posted by mediareport at 12:13 PM on October 10, 2005

Whether it is an offician Nobel prize or not, it seems like quite an honor for the person. Assuming that a high quality vetting process is engaged in before the selection made, it would still mean that these guys were the best in the world in their field, which is what these Nobel prizes are supposed to indicate.

Is there anything about the selection of a Nobel prize winner in Math that makes the selection more selective than the Nobel-ish prize in Economics? If not, then it seems like a non-issue.
posted by dios at 1:14 PM on October 10, 2005

Well, there is no Nobel for Math, which is why, say, Nash's mathematical work earned him the Economics prize.

There is the Fields Medal for mathematics, which is awarded only every four years.
posted by sonofsamiam at 1:19 PM on October 10, 2005

dios: No Nobel for Math.
The Economists have been gloating for YEARS over that one.....
posted by Floydd at 1:20 PM on October 10, 2005

Well, the crazy math done in Fields Medal-level work makes the mathematical content of most economics work look like scribblings in the sand :)
posted by sonofsamiam at 1:23 PM on October 10, 2005

Ok. Bad example on Math. Please read my previous comment and put in Literature.

If the difficulty in getting the Nobel in Literature is as prestiguous as the Nobel in Economics, what is the point in noting that it isn't an original Nobel Prize? It seems to me to be a distinction without a difference.

I am genuinely asking because I don't know the difference between the two that would make the argument about "original" relevant.
posted by dios at 2:57 PM on October 10, 2005

Beautiful Mind, Ugly Deception is a somewhat trollish (and biased) discussion of the importance of the fact that the Economics Prize isn't a "real" Nobel.

What I find disappointing is that the Royal Academy of Sweden has allegedly (and by evidence) decided not to permit opening up the Nobels any further. I think that biology and engineering, certainly, deserve the same recognition. At a certain point it becomes like the Olympics -- every host wants to add a favored local sport, say booger-flinging, and then the next host sometimes pushes to eliminate a sport, seeing as how we're spending all this money on booger-flinging facilities. There are literally too many sports in the Summer Olympics for the average person to know about, care about, or certainly follow even the highlights of -- and no way enough time in anybody's broadcast schedule. Curling fans weep every quadrennial. But back to the Nobels, you would conceivably have a lobby for all sorts of niche sciences if you loosened it a little. I dunno, I think it's worth it, because it's too bad that some other fascinating discoveries never get the worldwide recognition that, you know, behavioral analysis of game theory now does.
posted by dhartung at 11:08 PM on October 10, 2005

Goedel: Economic theory often lacks clear support from experiments and quantitative observations. It also has some problematic political tainting. So do the peace prize and the literature prize, but those fields make no claims of being part of science. The scientific merits of economics come from it being a subdivision of applied mathematics. It would be much better to have a general maths prize, which economists would be welcome to compete for.

By introducing the new prize, the Bank of Sweden bought their field some more scientific credibility. It should be the other way around. The scientific merits of a field should be undisputed before a Nobel prize is attached to it.
posted by springload at 2:38 AM on October 11, 2005

I really disagree that economics is just "applied mathematics," nor should it ever be. Good economists deeply understand the power-relations among humans, and attempt to understand how economic dramas will play out. It requires some REAL creativity to even get an idea of how to measure many interesting quantities. It requires a real knowledge of history, logic, and of human desire and drives. If you have a simplistic understanding of human behavior, then you will not be a very good economist.

The mathematical portion of nearly all economics work is either a) statistical or b) abstract modeling for the purpose of rigorously exploring an idea. The hard part of Nobel-worthy physics is not doing the math, but understanding the system under consideration deeply enough that you can begin to imagine plausible models and devise experiments to illuminate the borders of previous models' useful predictive regions. If economics is merely applied maths, then so is physics, doubly so :P
posted by sonofsamiam at 7:36 AM on October 11, 2005