Eugene Fama (b. 1939)
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Who They Were
Eugene Fama (born 1939) is an American economist long associated with the University of Chicago, where he became one of the most influential figures in modern finance. Working from the 1960s onward, he developed and tested ideas about how financial markets process information and set prices. He is best known as a leading proponent of the efficient-markets view - the argument that asset prices already reflect available information, making them very hard to predict. In 2013 he shared the Sveriges Riksbank Prize in Economic Sciences with Lars Peter Hansen and Robert Shiller for their empirical analysis of asset prices. Notably, Fama and Shiller reached very different conclusions about whether prices can be predictably wrong, and the award placed two contrasting readings of market behaviour on the same platform.
Key Contributions
Fama is central to the development of the efficient-markets hypothesis, the idea that prices in competitive financial markets rapidly incorporate available information, so that consistently beating the market is extremely difficult. His empirical work over decades examined how stock prices behave and how much of their movement can be explained or predicted. This research shaped both academic finance and practice, influencing the rise of index investing and the way analysts think about risk and return. His 2013 Nobel, shared with Lars Peter Hansen and Robert Shiller, recognised the empirical analysis of asset prices. The award is often cited in debates about economics as a science, because Fama and Shiller drew opposite conclusions about market efficiency - a disagreement that itself highlights how contested the study of asset prices remains.
On EconRecall
American financial economist, a leading proponent of efficient markets, who shared the 2013 Nobel for empirical analysis of asset prices. Play the games that feature Eugene Fama: