SIOE and the Nobel Prize

By Patrick L. Warren

The 2015 Nobel Prize in Economics will be announced in a little under a week (formally, The Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel). We all know that the first three Presidents of our organization each won the Prize (Coase in 1991, North in 1993, and Williamson in 2009), and although Elinor Ostrom (2009) never served as president, she was strongly affiliated with us for many years.

Instead of reveisting these scholars, I want to talk about the three most recent recipients. None of them are closely identified with SIOE, but nevertheless the study of institutions and organizations have been major themes in their work, perhaps bigger than most people realize.

Just last year, Jean Tirole won the award "for his analysis of market power and regulation." But Tirole's broad approach is very organizational. In fact, his most cited paper is actually his paper with Phillip Aghion about authority in orgnizations. His work with Laffont on regulation is often couched in explicitly organizational terms, where the incentives faced by regulatory intermediaries are modelled quite similarly to how we might model a middle manager within an organization. Obviously Tirole has made major contribution outside of institutions and organizations, but his work has clearly contributed in major ways and been, in turn, influenced in major ways by organizational economics.

In 2013, Robert Shiller mentioned institutions more than 15 times in his Nobel acceptance speech, and it was obvious that careful attention to the "rules of the game" in fincancial market are a big part of his program for understanding speculative asset prices.

In 2012, Al Roth won for his work on market design. Again, institutions came up again and again in his acceptance speech, where he talks about how a free market "needs institutions that let it work well." There is a sense in which Roth won for figuring out what institutitons work well in what settings.

The Nobelists' prize lectures are extremely interesting. I've linked to them all, above. Check them out. I'm interested to see if next week's recipient continues the trend of an interest in Institutions and Organizations.