Michael Spence
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| Birth | November 7, 1943 Montclair, New Jersey, USA |
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| Nationality |  United States |
| Institution | Harvard University Stanford University |
| Field | Microeconomics |
| Alma mater | Harvard University (Ph.D.) University of Oxford (B.A.) Princeton University (B.A.) |
| Influences | Kenneth Arrow Thomas Schelling Richard Zeckhauser |
| Contributions | Signaling theory |
| Awards | John Bates Clark Medal (1981) Nobel Memorial Prize in Economics (2001) |
| Information at IDEAS/RePEc | |
Andrew Michael Spence (born November 7, 1943) is an American-born, Canadian-raised economist and recipient of the 2001 Nobel 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 Chairman of the Commission on Growth and Development.
[edit] Selected works
- Spence, A. M. (1973). "Job Market Signaling". Quarterly Journal of Economics 87 (3): 355–374. http://www.jstor.org/stable/1882010.
- Spence, A. M. (1974). Market Signaling: Informational Transfer in Hiring and Related Screening Processes. Cambridge: Harvard University Press.
[edit] See also
- List of economists
- Bank of Sweden Prize in Economic Sciences in Memory of Alfred Nobel
- Rhodes Scholarship
[edit] External links
- Michael Spence's Biography
- A technical summary of the work.
- Autobiography
- A. Michael Spence – Autobiography
- IDEAS/RePEc
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