Eric Maskin, Nobel Laureate

Here is an interview with Eric Maskin.  His 1970s work explored when societies can choose procedural rules which lead to a social optimum.  In the 1980s he focuses on optimal auction theory and how to raise the most revenue.  He also has important work on the economics of monopoly.  In the 1990s he considered the existence of equilibria in "discontinuous games," and gave us a much better understanding of how such games might be tractable.

Here is Maskin's CV.  Here is a list of his major works.  Here are his two NBER Working Papers, one of which tries to explain wage inequality in terms of shifting skills.  Here is Wikipedia: "His current research projects include comparing different electoral rules, examining the causes of inequality and studying coalition formation."  He's also been working on hyperbolic discounting lately.

Here is a draft of his famous paper, with Jonathan Riley, on asymmetric auctions.  Maskin and Riley assume that people have different opportunity costs for "completing projects," and that only some of this difference is common knowledge.  That leads to what they call "asymmetric buyers."  The goal is to use that insight to explain why different auction methods -- Dutch vs. English auction -- don't yield the same revenue in practice.

Mike Moffat predicted this prize and sums up Eric's work.  Here is Eric arguing that patenting doesn't much increase software innovation.

Here is Eric, with Partha Dasgupta, showing that majority rule democracy is indeed the most robust voting rule.  This paper represents much of Eric's work on social choice theory.  I am personally most familiar with Eric's very first paper, on utilitarianism.  There he showed that social welfare functions based on interpersonally comparable utilities would satisfy certain desirable properties.  This paper helped create a consensus that Arrow's "impossibility" theorem did not in fact imply nihilism about moral judgments in collective choice.

Here is Eric on Google Scholar.  Here is Eric's most cited paper, with Drew Fudenberg.  This piece formalizes the "folk theorem" -- which concerns the prospects for long-term cooperation based on fear of punishment -- in a setting with imperfection information.  The origins of the folk theorem are unclear, but this has become the one paper that everyone cites on it.

Good luck reporters!

Here is from the Nobel Committee:

In view of these difficulties, it is desirable to design mechanisms in which all equilibrium outcomes are optimal for the given goal function. The quest for this property is known as the implementation problem. Groves and Ledyard (1977) and Hurwicz and Schmeidler (1978) showed that, in certain situations, it is possible to construct mechanisms in which all Nash equilibria are Pareto optimal, while Eric Maskin (1977) gave a general characterization of Nash implementable social-choice functions. He showed that Nash implementation requires a condition now known as Maskin monotonicity (see Section 3.3 for an illustration of this property). Maskin (1977) also showed that if Maskin monotonicity and a condition called no-veto-power are both satisfied, and if there are at least three agents, then implementation in Nash equilibrium is possible.

Maskin considered Nash equilibria in games of complete information, but his results have been generalized to Bayesian Nash equilibria in games of incomplete information (see Postlewaite and Schmeidler, 1986, Palfrey and Srivastava, 1989, Mookherjee and Reichelstein, 1990, and Jackson, 1991). For example, Palfrey and Srivastava (1991) show how the double auction can be modified so as to render all equilibria incentive efficient.

Maskin’s results have also been extended in many other directions, such as virtual (or approximate) implementation (Matsushima, 1988, Abreu and Sen, 1991), implementation in renegotiation-proof equilibria (Maskin and Moore, 1999) and by way of sequential mechanisms (Moore and Repullo, 1988).  Implementation theory has played, and continues to play, an important role in several areas of economic theory, such as social choice theory (Moulin, 1994) and the theory of incomplete contracts (Maskin and Tirole, 1999).