A. Michael Spence
The Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel 2001
Born: 1943, Montclair, NJ, USA
Affiliation at the time of the award: Stanford University, Stanford, CA, USA
Prize motivation: “for their analyses of markets with asymmetric information”
Prize share: 1/3
Michael Spence was born in Montclair, New Jersey, USA to Canadian parents. He grew up in Canada until leaving for college in the United States. Spence studied at Yale University, the University of Oxford and Harvard University, earning a Ph.D. in economics in 1972. He taught at Harvard and at Stanford University, serving, as dean of the latter’s business school in the 1990s. Michael Spence has three children from a previous marriage.
Through his research on markets with asymmetric information, Michael Spence developed the theory of “signaling” to show hos better-informed individuals in the market communicate their information to the less well informed to avoid the problems with adverse selection. His own research emphasized education as a productivity signal in job markets, while subsequent research has suggested many other implications, e.g., how firms may use dividends to signal their profitability to agents in the stock market.
Their work and discoveries range from the Earth’s climate and our sense of touch to efforts to safeguard freedom of expression.
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