Joseph Stiglitz (b. 1943)
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Who They Were
Joseph Stiglitz (born 1943) is an American economist and one of the most prominent figures in the economics of information. Over a career at universities including Columbia, and in public roles such as chief economist of the World Bank, he has combined influential theoretical work with active engagement in policy debate. His research helped establish that many markets are shaped by the fact that different participants hold different information, overturning the assumption that buyers and sellers are equally informed. In 2001 he shared the Nobel Memorial Prize in Economic Sciences with George Akerlof and Michael Spence for their analyses of markets with asymmetric information. He has since become a widely read commentator on globalisation, inequality and financial regulation. He remains one of the most cited economists in the world and an active participant in public debate.
Key Contributions
Stiglitz was a central developer of the economics of asymmetric information, the study of markets in which one side knows more than the other. Within the framework recognised by the 2001 Nobel, his particular focus was on screening: the actions the less-informed party can take to draw out information from the better-informed, complementing Michael Spence's analysis of signalling by the informed side. This body of work underpins the modern understanding of adverse selection, moral hazard, signalling and screening, and it explains why markets for insurance, credit and labour often behave very differently from the frictionless ideal. Stiglitz showed that such informational imperfections are pervasive and can cause markets to fail or to allocate resources inefficiently, providing a rigorous rationale for certain forms of regulation. He shared the Nobel Memorial Prize in 2001 with Akerlof and Spence.
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American economist and 2001 Nobel laureate whose work on asymmetric information reshaped the analysis of markets. Play the games that feature Joseph Stiglitz: