News FocusNOBEL PRIZE IN ECONOMICS

Knowledge Is Power

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Science  19 Oct 2001:
Vol. 294, Issue 5542, pp. 505
DOI: 10.1126/science.294.5542.505

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Summary

In classic economic theory, everybody knows what everybody else knows; the real world, of course, doesn't work that way. George Akerlof, Michael Spence, and Joseph Stiglitz have won this year's Nobel Prize for work exploring the implications of "asymmetric information." Their findings have undercut many once-cherished assumptions of economics, including the mantric "law" that supply equals demand, which may not hold when information is unequally held.