Eric Maskin

(1950-)

Eric Maskin is the Albert O. Hirschman Professor of Social Science at the Institute for Advanced Study, and a visiting lecturer with the rank of Professor in the Princeton University Economics Department[1]. He attended Harvard University where he received his A.B. and Ph.D. After he earned his doctorate from Harvard University, Maskin went to the University of Cambridge in 1976 where he was a research fellow at Jesus College. He taught at MIT from 1977-1984 and from 1985-2000 at Harvard, where he was the Louis Berkman Professor of Economics. In 2000, he moved to the Institute for Advanced Study.

He has worked in diverse areas of economic theory, such as game theory, the economics of incentives, and contract theory. He is particularly well known for his papers on mechanism design/implementation theory and dynamic games. His current research projects include comparing different electoral rules, examining the causes of inequality and studying coalition formation. He is a Fellow of the American Academy of Arts and Sciences, Econometric Society, and the European Economic Association, and a Corresponding Fellow of the British Academy. He was president of the Econometric Society in 2003.

Maskin shared the 2007 Nobel Prize in Economics along with Leonid Hurwicz and Roger Myerson “for having laid the foundations of mechanism design theory.”

The following press release from the Royal Swedish Academy of Sciences describes Maskin’s work:

Adam Smith's classical metaphor of the invisible hand refers to how the market, under ideal conditions, ensures an efficient allocation of scarce resources. But in practice conditions are usually not ideal; for example, competition is not completely free, consumers are not perfectly informed and privately desirable production and consumption may generate social costs and benefits. Furthermore, many transactions do not take place in open markets but within firms, in bargaining between individuals or interest groups and under a host of other institutional arrangements. How well do different such institutions, or allocation mechanisms, perform? What is the optimal mechanism to reach a certain goal, such as social welfare or private profit? Is government regulation called for, and if so, how is it best designed?

These questions are difficult, particularly since information about individual preferences and available production technologies is usually dispersed among many actors who may use their private information to further their own interests. Mechanism design theory, initiated by Leonid Hurwicz and further developed by Eric Maskin and Roger Myerson, has greatly enhanced our understanding of the properties of optimal allocation mechanisms in such situations, accounting for individuals' incentives and private information. The theory allows us to distinguish situations in which markets work well from those in which they do not. It has helped economists identify efficient trading mechanisms, regulation schemes and voting procedures. Today, mechanism design theory plays a central role in many areas of economics and parts of political science.

Sources: Wikipedia