Monday, October 13, 2014

Tirole - my intellectual hero - wins Nobel Prize

Impressive, a solo-win for Jean Tirole of the Nobel Prize. A bit surprising but I'm thrilled. Jean Tirole was my intellectual hero as a grad student. I did my best to model the papers I wrote after his. The Nobel committee cites his work on regulation (i/o) but its his latter day work; his pioneering approach to behavioral economics that attracted me (even though long before I even knew about behavioral economics, I was excited by and citing his work on open source software for my master's thesis in computer science). Using simple mathematical theory, (theory a high school student can understand as my adviser used to call it), he illuminated the subtleties in many psychological and social and political issues from social norms, to identity, to self confidence, to corporate social responsibility, to npr fund raising, to will-power, to expertise. Although this approach hasn't really caught on in mainstream behavioral economics, Tirole's work is still highly regarded.

My favorite paper of his with Roland Benabou, illuminated the Tom Sawyer effect. Tom Sawyer is famous for getting people to do his chores painting a fence, by instead of paying people to do it, *charging" them to do it.. This is echoed by psychology studies that find if you pay children to read books, they enjoy reading books less. Their argument was that before starting an activity that you are unfamiliar with, (like painting a fence) you aren't quite sure how fun it is. So if someone charges you to do it, you infer that it must be really fun, and therefore, you are now willing to pay.

I met him once at a conference in Toulouse and appreciated that he was warm and generous with his time. What a great choice!

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