A. Michael Spence
- (Andrew) Michael Spence is an economist and teacher best known for his theory of job-market signaling. Spence has filled in as a teacher at New York University's Leonard N. Stern School of Business beginning around 2010. Spence has additionally educated at Harvard University and filled in as the Philip H. Knight Professor Emeritus of Management in the Graduate School of Business at Stanford University.
Furthermore, he is a senior individual at the Hoover Institution, a Stanford-based unregulated economy think tank. Spence has likewise served on the publication boards of the Journal of Economic Theory and American Economics Review and on the boards of several economics councils, including the National Research Council Board on Science, Technology, and Economic Policy.
Alongside two other American economists, Spence was awarded the 2001 Nobel Prize in Economics.
Early Life and Education
Brought into the world on November 7, 1943, in Montclair, New Jersey, Spence experienced childhood in Canada. He learned at Princeton University, the University of Oxford, where he was a Rhodes Scholar, and Harvard University.
Awards and Honors
His initial work earned Spence the John Bates Clark Medal of the American Economic Association, which was awarded to an American economist under 40 years old who was considered to have made the most important and significant contributions to the areas of economic information and knowledge.
Spence has earned an assortment of other lofty awards, remembering the John Kenneth Galbraith Prize for greatness for educating and the David A. Wells Prize for the outstanding doctoral paper at Harvard.
In 2001, Spence earned a Nobel Prize, formally named The Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel, for his analysis of data lopsidedness. His work explicitly centered around how people can involve their education credentials as a signal to likely employers. He was awarded the Nobel Prize jointly with George Akerlof and Joseph Stiglitz, teachers at the University of California at Berkeley and Columbia University, individually.
Spence is generally notable for his theory of market signaling under conditions of asymmetric information. This model is for the most part applied to labor markets, yet it tends to be alluded to in other market settings. Market signaling can happen when a job candidate has better data about their own productivity than a prospective employer and productivity changes across various types of workers.
Higher productivity candidates have an incentive to believably impart their type to the prospective employer by taking part in some expensive activity that is just conceivable (or more probable workable) for a higher productivity employee. In Spence's original 1973 paper, this signal comprised of getting a college degree.
By spending the time and money to complete a degree, an activity that requires a certain amount of expertise, intelligence, hard working attitude, and so on to succeed, a job market candidate can signal their higher productivity to prospective employers.
It is important to note that the signal has value to the job candidate independent of any increase in expertise or information acquired in the course of their studies; they probably won't even gain any new skills, information, or other increase in ability from their education. This is as opposed to previous (regardless common) hypotheses of education that make sense of it as an investment in human capital.
Spence drove important examinations of development economics as Chair of the Commission on Growth and Developments, sponsored by several national state run administrations and the World Bank, somewhere in the range of 2006 and 2010.
Spence drove important empirical examinations of development economics as Chair of the Commission on Growth and Developments, sponsored by several national states and the World Bank somewhere in the range of 2006 and 2010.
As a general rule, these studies reported the outcome of the commodity drove growth strategy, finding that 13 economies seeking after the strategy had reliably become 7% or all the more every year for north of 25 years.
Monopolistic Competition and Industrial Organization
Spence has distributed several hypothetical papers on monopolistic competition, or markets portrayed by firms who produce separated products. His models show the way that monopolistic competition can lead to distortion of markets and misallocation of resources (relative to perfect competition), which he contends may be cured through different forms of regulation.
His work on this point was refered to as part of his Bates Medal award from the American Economic Association.
The Bottom Line
Spence has made outstanding contributions to the field of economics, and in particular to hypotheses around data economics, development economics, monopolistic competition, and industrial organization.
His success of the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel in 2001 made him one of more than twenty American Nobel laureates in the field of economics beginning around 2000.
- Michael Spence is an economist who won the Nobel Prize in 2001 for his theory of market signaling.
- Spence is generally notable for his theory of market signaling under conditions of asymmetric data.
- Spence has earned an assortment of other renowned awards, remembering the John Kenneth Galbraith Prize for greatness for educating and the David A. Wells Prize for the outstanding doctoral paper at Harvard.
- Spence has likewise done research on development economics and the ramifications of monopolistic competition.
- Dr. Spence has been a teacher of economics at New York University beginning around 2010.
What Is A. Michael Spence Best Known for?
Andrew Michael Spence is best known for winning the 2001 Nobel Memorial Prize in Economic Sciences for his theory of market signaling.
What Is the Proposed Idea of Signaling of Michael Spence?
Spence's theory of market signaling was an analysis of data imbalance. His Nobel Prize-winning work explicitly centered around how people can involve their education credentials as a signal to likely employers.
Which Awards Did A. Michael Spence Win?
American economist Michael Spence won the 2001 Nobel Memorial Prize in Economic Sciences. He additionally won the 1981 John Bates Clark Medal from the American Economic Association, awarded to an economist under 40 years of age.