Mechanism design and the Nobel Prize

So, the latest Nobel prize for economics goes to three people (Hurwicz, Maskin & Myerson) for work on "mechanism design".

The statement announcing the award: "The theory allows us to distinguish situations in which markets work well from those in which they do not. It has helped economists identify efficient trading mechanisms, regulation schemes and voting procedures."

This sounds interesting as it develops on game theory but moves us away from the notion of perfect markets and recognises the role of self-interest, information asymmetry and so on.

Amongst other applications out in the real world include the design of the auctions for European 3G licences.

John Nash (as in "a beautiful mind") has been a key player in this whole field. Some talk about it being the basis of a Third Way between the market led capitalist approach and the command and control socialist approach.

I need to look into this some more but some readings can be found at:

http://www.voxeu.org/index.php?q=node/656
http://www.guardian.co.uk/business/2007/oct/15/ukeconomy.economics2

Lord Levy arrested - the plot thickens

So "Lord Stashpoint" has been arrested under suspicion of perverting the course of justice. Having lived under the rule of Ian Smith (not Duncan) and Robert Mugabe I was suspicious that things would not even get this far. How wrong I could be.

What with the early arrest of Ruth Turner and this new charge it is reassuring to see the police using a wide ranging approach. The concern has been for so long that the very narrowest approach would be taken, and much as Watergate unravelled on the detail of the cover-up rather than the crime - so this whole episode could have passed by quickly and relatively quietly.

All credit to the police so far!