Back to The Undercover Economist homepageThe Economist has a nice Economics Focus on last week’s Nobel:
“WHAT on earth is mechanism design?” was the typical reaction to this year’s Nobel prize in economics, announced on October 15th. In this era of “Freakonomics”, in which everyone is discovering their inner economist, economics has become unexpectedly sexy. So what possessed the Nobel committee to honour a subject that sounds so thoroughly dismal? Why didn’t they follow the lead of the peace-prize judges, who know not to let technicalities about being true to the meaning of the award get in the way of good headlines?
Conclusion:
The work of this year’s winners is closely related to that of several earlier laureates, including William Vickrey and James Mirrlees, John Harsanyi and John Nash, the game theorist whose life story was made into an Oscar-winning film, “A Beautiful Mind”. Mr Maskin lives in a house in Princeton once home to Albert Einstein (and at least one other Nobel laureate), and he dresses up as the great physicist at Halloween, so there may be the makings of a plot there. Yet, despite the importance of the topic, The Economist suspects there are no plans for “Mechanism Design—The Movie”.
Tim writes about the economics of everyday life. His 