2010 Nobel Prize: Diamond, Mortensen, Pissarides
The 2010 Nobel Prize in Economics has been awarded to Peter Diamond (MIT), Dale Mortensen (NWU) and Christopher Pissarides (LSE). Tyler Cowen has written a good concise summary of each prizewinner's work and contribution (linked above). I promised on twitter earlier today to write a post about the application of their research to the 2008-2010 recession. First I'll mention Diamond's book on behavioural economics , which is one of the respected texts in the field and which I've been meaning to order for a while. Today I finally got around to it. The introduction, available here , gives a very clear and perceptive abstraction of the key contributions of behavioural economics as currently practised. It can be summarised in three departures from the standard model: bounded rationality, bounded willpower and bounded self-interest. He (and co-author Hannu Vartainen) also reference the psychological process of decision-making as an important part of behavioural analys...