unfortunaltey no Noble price in Economics to Hedge fund blow up candidates this year, but still in a intereasting area?Daniel kahneman and Veron Smith for their work in introducing psychology and experimental testing in economic science.

Just as in the case of Black; Tversky who was the close collaborator of Kahneman did not get the price for the same reason.Very deserved award, I would say, as they, with "Heuristics and Biases", produced one of the most readable, cited and fun papers.I'm sure Henriette Prast could add a few comments.

Well actually, The Royal Swedish Academy of Sciences meant to award the 1997 Nobel economics prize to Amos Tversky and Myron Scholes alone. Unfortunately, Tversky died few months before the official announcement. Perhaps, justice has been done in a way or another, after all. However, I personally favor the more recent work by Richard Rouge and Nicole El Karoui: "Pricing via utility maximization and entropy". Furthermore, their work is much more related to the financial industry and real world portfolio replications.

"Heuristics and Biases" looks interesting. Does anyone know where a copy can be found on the internet?

what is this world coming to? ...giving the Nobel Prize in Economics to Psychologists ...why not give it to a Doctor just because he studied the relationship of loss in trading to heart attacks?he can set up a lab with mice I guess ... we should re-start the Wilmott Prize in Quantitative Finance ...

and Congratulations to Jimmy Carter as well ...like I said ... what is this world coming to? ...

right winger! I'd rather have some decision scientists win it who show an inspirational sense of humour than some business school gurus who preach the sort of Enron economics

Ridiculous! The Nobel Prize I mean. A handful get recognized for contributions & brilliance. What about the numerous others? I think Hemingway did the right thing ..... And then, even if you felt it was okay to award these prizes, you wonder if the Peace prize is a joke. Literature too at times seems to have a political slant. Mr. Nobody Karzai, steps out of the cold, and is nominated for the Peace Prize? For the other Prizes you have scientists cautiously recognized decades after their discoveries, and on the other hand, it seems the Peace Prize is given a drop of the hat to make a political statement. Two thumbs down!!

Reza....Why dont you like that jimmy gest the price....it is a message for Bush, a fellow I firstly dislike, and now I am afraid of.Jimmy had some principles during his precidency and didnt support the military rulers in the southern countries of Latin America. Then came Reagan and Kissinger.....

I know, I was only joking ...

Indeed, problem with prinicples, as Carter found during the Iran hostages crisis is not that you have them,but that other people know you have them. Thus a country with the military capability of New Hampshire ran rings around the USA.As you may recall, it was in Reagan's term that they were released.

Indeed, it is the difference between economics and business school curricula.BS's teach the sort of things that economics warn about. Any decent econ course will cover agency theory, and predict the Enron fiasco. Short version is that the value of an option increases with volatility, as we all know.Managers are paid in share options.Thus they are incenitivised to become risk loving. One perverse outcome is that as a firm's share price drops to below the exercise price, then increasingly insane (from the point of view of shareholders/employees/bondholders) becomerational from the POV of managers.It is rational to play double-or-quits on the share price if there is a >50% chance of being on the double side.However, under share options managers will play d-o-q when there is only a 10% chance of success.Another perverse outcome is that share price stabilisation is actually a bad thing for a manager.Thus he may sell at below value a dull, yet profitable subsidiary.dominiConnor

it's year 2002 and Robert Engle has still not been awarded his Nobel Prize in Economics ...of course, there is always 2003 ...

I wrote this in Oct 16 2002 !!!!Do you Believe in me now ???

We're not worthy! We're not worthy!