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Published: 2007-10-15

Nobel Prize winner to attend Umeå autumn awards ceremony

NEWS Eric S. Maskin will be attending the autumn awards ceremony at Umeå University to receive the 2007 Erik Kempe Award. The annual commemoration honours the appointment of honorary doctors and instalment of new professors. Maskin will also deliver a popular science lecture in correlation with the ceremonial weekend. Earlier today, he was named one of three recipients of the Nobel Prize in economic science.

”We were already elated to have one of the world’s most renowned economists as one of our prize recipients at the annual autumn ceremony, and now that he is a Nobel Prize winner makes it even more significant, said Göran Sandberg, Vice-Chancellor of Umeå University.

Professor Eric S. Maskin will share the economics prize with Leonid Hurwicz and Roger B. Myerson for their joint work in laying the foundations of “mechanism design theory.” It has helped economists identify efficient trading mechanisms, regulation schemes and voting procedures. Along with Paratha Dasgupta, Maskin will receive the 2007 Erik Kempe Award in Environmental and Resource Economics at the Umeå University autumn awards ceremony on 20 October for their study on "Uncertainty and Hyperbolic Discounting:" The work analyses typical economic decision problems and its implications for the future. The work has been published in American Economic Review, 2005, volume 95, issue 4, pages 1290–1299.

Erik Maskin will deliver his ceremonial lecture titled “Why do we Procrastinate?” on Friday 19 October at 2:10 pm, Lecture Hall G in the Humanities Building on the Umeå University campus.

The nomination committee for the Erik Kempe Award presented the prize to Partha Dasgupta and Eric Maskin with the following motivation: The way in which we choose to discount the future is arguably one of the most important decisions that social scientists make in appraising many global environmental policies (preventing global warming, protecting endangered species, etc).

The idea of hyperbolic discounting has found its way into cost-benefit practice, although its practice has been criticized on grounds of dynamic inconsistency. Dasgupta and Maskin provide an evolutionary explanation for hyperbolic discounting based on uncertainty over when in the future the impacts of alternative actions are going to be realized. Although the behavior predicted is dynamically consistent, it appears inconsistent.

The authors show that the optimal decision means being relatively patient when the time horizon is long and impatient when the horizon grows short. Though the precise implications of this for social discounting remain for exploration, this paper ­ written by two of the pre-eminent economists of our generation, and appearing in the world’s leading economic journal - seems to offer an important foundation for attaching higher weights to the distant future than standard exponential discounting would suggest.

Erik Maskin was born in New York City, USA in 1950. He attended Harvard University and received an A.B. degree in Mathematics in 1972, an A.M degree in Applied Mathematics 1974, and Ph.D. degree in Applied Mathematics in 1976. He has held professorships in economics at the Massachusetts Institute of Technology and Harvard University, among others. Currently, he is the Albert O. Hirschman Professor of Social Sciences at the Institute for Advanced Study in Princeton, New Jersey. He has also been the editor of the journal Economics Letters since 1992.

Maskin has mainly worked within the area of microeconomics in diverse areas of economic theory; especially in game theory, in which he is one of the world’s leading experts. His current projects involve designing auctions, comparing different electoral rules such as majority voting, understanding the role of monetary policy, and studying the advantages and drawbacks of protecting intellectual property. Press photo of Erik Maskin is available at: www.umu.se/infoenheten/promotion/HT2007/Pristagare/

Editor: Carina Dahlberg