Wednesday, May 06, 2015

Nobel Prizes and Rejection

George Akerlof and Vernon Smith
Images from Wikipedia*
Just finished The Nobel Memorial Laureates in Economics which I picked up years ago in a second hand book stall in Cambridge and have been browsing occasionally.

Interesting to find that although George Akerlof's paper 'Market for "Lemons"' is "probably the single most important contribution to the literature on economics of information and the paper for which Akerlof was awarded the was rejected in turn by: the American Economic Review, the Review of Economic Studies and the Journal of Political Economy. The first two rejections were on the grounds of triviality, the last because the argument... was, in the view of the referees, simply wrong."  It was therefore 3 years before it was published in 1970 in the Quarterly Journal of Economics.

Similarly Vernon Smith's seminal paper 'An Experimental Study of Competitive Market Behaviour' was only published in the Journal of Political Economy in 1962 "after two revisions, four negative referee reports and an initial rejection."

Of course at one level this is understandable. Nobels are won for changing the way people think and therefore it's reasonable that when young guns submit these radical ideas (Akerlof was 26 and Smith was 34) the established reviewers and editors should find them somewhat paradoxical. But it is still a sobering thought - especially since Nobels in science sometimes have that history as well.

Akerlof is also quoted as saying in 2002 "Most of us think of central bankers as cautious. conservative and safe. But I consider them to be dangerous drivers: to avoid the oncoming traffic of inflation they drive on the far edge of the road, keeping inflation too low and unemployment too high." (Akerlof 2002, p 422)  Hopefully his assessment has changed somewhat now that his wife is Chairman of the Fed!

I haven't met Akerlof though I do know both Joe Stiglitz and Mike Spence with whom he shared the Nobel. But he sounds a great guy.

* "George Akerlof" by Yan Chi Vinci Chow . Licensed under CC BY 3.0 via Wikimedia Commons

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