Nobel Laureate to address economics and society

Eric Maskin, co-winner of the 2007 Nobel Memorial Prize in Economics, will be the keynote speaker at the Oregon Nobel Laureate Symposium at Linfield College. The public is invited to the free lecture, held Thursday, April 26, at 7:30 p.m. in the Richard and Lucille Ice Auditorium in Melrose Hall.

In his “Mechanism Design: How to Implement Social Goals” presentation, Maskin will offer a nontechnical discussion of how society can design a mechanism or institution for achieving social or economic goals.

Maskin’s 2007 Nobel prize was awarded for groundbreaking work in the development of an economic theory known as mechanism design. The theory currently plays a central role in economics and politics. For example, it can help frame discussions of which voting methods are most likely to promote democratic values or how markets can most efficiently operate. It can also add insight to discussions of government intervention in the health care market.

Instead of starting with a situation and trying to predict the outcome it leads to, market design economists start with the outcome they want and try to create a scenario ― the “game” in game theory ― that gives rise to that outcome. Unlike the vast majority of economics, which studies markets and world conditions as they are, Maskin explores how markets could be created or tweaked to achieve social goals.

“I get annoyed by the claim that ‘the invisible hand’ — i.e., markets by themselves — will take care of everything,” Maskin said. “We know, from theory, that for very good reasons some markets are not going to work the way we would wish them to.” He points to the financial and housing market crashes of recent years as examples.

Maskin’s early work, begun in the 1970s, addressed the question of how one can devise procedures that will help society make the best choice from among a set of alternatives. Influenced by his work, a vast literature has since evolved.

The visiting Nobel Laureate is the author of more than 100 papers on topics such as accountability in government, government spending limits, the causes of inequality, competition among firms, wage inequality and majority rule in political elections, among many other topics. He provided commentary on the current recession, asserting that economic theory did a good job of predicting the financial crisis, but few people were paying attention.

Maskin has made significant contributions to game theory, contract theory, social choice theory and political economy. He is president of the Game Theory Society, director of the Jerusalem School in Economic Theory, and a former president of the Econometric Society. He has served as editor of the Quarterly Journal of Economics, Economics Letters and the Economic Theory Series, and as associate editor for numerous journals.

Maskin teaches at Harvard University, and previously taught at MIT and Princeton University. He is an honorary fellow of Jesus College at the University of Cambridge and St. John’s College in Cambridge and has received numerous awards and recognitions for his scholarship.

He is also a member of the National Academy of Sciences and a fellow of numerous academies, including the American Academy of Arts and Sciences, British Academy and European Economic Association.

Maskin will be in residence at Linfield College during April 25 to 28. For more information about his presentation, contact John McKeegan at (503) 883-2408.