Michael Spence

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For other persons named Michael Spence, see Michael Spence (disambiguation).
Michael Spence

Born November 7, 1943 (1943-11-07) (age 64)
Montclair, New Jersey, USA
Residence Stanford, California, USA
Nationality American
Fields Economist
Institutions Harvard University
Stanford University
Alma mater Harvard University (Ph.D.)
University of Oxford (B.A.)
Princeton University (B.A.)
Doctoral advisor Kenneth Arrow
Thomas Schelling
Richard Zeckhauser
Known for Signaling theory
Notable awards John Bates Clark Medal (1981)
Nobel Prize in Economics (2001)

Andrew Michael Spence (born November 7, 1943) is an American-born, Canadian-raised economist and recipient of the 2001 Nobel Memorial Prize in Economics, along with George A. Akerlof and Joseph E. Stiglitz, for their work on the dynamics of information flows and market development. He conducted this research while at Harvard University. In the current technological environment - with ever more abundant information flows about market development, prices, profit margins, investment instruments and rates of return - their work is more relevant than ever.

Michael Spence is probably most famous for his job-market signaling model, which essentially triggered the enormous volume of literature in this branch of contract theory. In this model, employees signal their respective skills to employers by acquiring a certain degree of education, which is costly to them. Employers will pay higher wages to more educated employees, because they know that the proportion of employees with high abilities is higher among the educated ones, as it is less costly for them to acquire education than it is for employees with low abilities. For the model to work, it is not even necessary for education to have any intrinsic value if it can convey information about the sender (employee) to the recipient (employer) and if the signal is costly.

In 1966, Spence was awarded a Rhodes Scholarship at Oxford University upon graduation from Princeton University with a degree in Philosophy. He studied Mathematics at Oxford. Spence is a former Dean of the Stanford Graduate School of Business and is presently the Chair of the Commission on Growth and Development.


[edit] Literature

  • Spence, A. M., 1973, "Job Market Signaling", Quarterly Journal of Economics Vol. 87, No. 3, pp. 355-374.
  • Spence, A. M. (1974) Market Signaling: Informational Transfer in Hiring and Related Screening Processes, Cambridge: Harvard University Press.

[edit] See also

[edit] External links







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Nobel Laureates in Economics
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Persondata
NAME Spence, A. Michael
ALTERNATIVE NAMES
SHORT DESCRIPTION Economist
DATE OF BIRTH November 7, 1943
PLACE OF BIRTH Montclair, New Jersey
DATE OF DEATH
PLACE OF DEATH