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News > Economy
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3 share Nobel for economics
graphic October 10, 2001: 12:48 p.m. ET

The 2001 Nobel prize for economics has been given to 3 U.S. economists.
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  • Nobel Foundation
  • Asymmetric Information
  • George Akerlof
  • Michael Spence
  • Joseph Stiglitz
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    NEW YORK (CNNmoney) - The 2001 Nobel prize for economics was awarded Wednesday to three American professors, whose work on the business impact of asymmetric information laid the foundation for a theory of markets used today.

    The theory of asymmetric information looks at the disparate levels of knowledge - perhaps about a product or service that necessarily separates, say, a vendor and a buyer - and how this disparity effects their transaction and the process.

    "An example might be, when the owner of the firm knows more than the shareholders," Joseph Stiglitz, professor of economics, business and international affairs at Columbia University, and one of the three recipients, told CNNfn.

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    Joseph Stiglitz
    "So the theory asks, how can shareholders ascertain what the firm's real prospects are when they have less information," Stiglitz asked. "It's a pervasive aspect of modern economies."

    Stiglitz, 58, is a former White House adviser and former Chief Economist of the World Bank.

    The Royal Swedish Academy of Sciences said Stiglitz would share the prestigious $1 million prize with George Akerlof, 61, economics professor at University of California at Berkeley, and Michael Spence, 58, former dean of Harvard and Stanford universities.

    "During the 1970s, this year's laureates laid the foundation for a general theory of markets with asymmetric information," the academy said in its citation.

    graphic   VIDEO  
    graphicCNNfn's Amanda Lang takes a closer look at the three U.S. economists and their achievements.
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    The work of the three economists showed how markets function imperfectly because participants have inadequate or uneven access to information, an obstacle that could, for example, make it difficult for lenders and investors to assess risks properly.

    It challenged traditional economic theory that open and unregulated markets function perfectly and efficiently, and suggested that intervention by governments or other institutions may sometimes be needed to address imperfections.

    The trio's contributions "form the core of modern information economics" and have led to practical applications in areas ranging from traditional agricultural markets to modern financial markets, the academy said.

    -- from staff and wire reports graphic

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    Nobel Foundation

    Asymmetric Information

    George Akerlof

    Michael Spence

    Joseph Stiglitz





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    Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer. Morningstar: © 2018 Morningstar, Inc. All Rights Reserved. Factset: FactSet Research Systems Inc. 2018. All rights reserved. Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor's Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2018 and/or its affiliates.

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