Founder of the education signaling model: Michael Spence won Nobel Prize in 2001

PARK CHEOLSUNG — Fri, 20 Oct 2006 02:26:00 GMT

During the lecture I mentioned that the founder of the education signalling model, Michael Spence of Stanford University, won the Nobel Prize in Economics. Here is the citation for him when he won the prize, with two other renowned economists (George A. Akerlof and Joseph E. Stiglitz), in 2001:

Michael Spence identified an important form of adjustment by individual market participants, where the better informed take costly actions in an attempt to improve on their market outcome by credibly transmitting information to the poorly informed. Spence showed when such signaling will actually work. While his own research emphasized education as a productivity signal in job markets, subsequent research has suggested many other applications, e.g., how firms may use dividends to signal their profitability to agents in the stock market.

For his prize lecture and more information on prize winners in 2001, go to http://nobelprize.org/nobel_prizes/economics/laureates/2001/spence-lecture.html

LABOUR ECONOMICS I : EC3361

Founder of the education signaling model: Michael Spence won Nobel Prize in 2001