Andrew Michael Spence (born November 7, 1943) is a Canadian-American economist and Nobel laureate.
Spence is the William R. Berkley Professor in Economics and Business at the
Stern School of Business at
New York University
New York University (NYU) is a private research university in New York City. Chartered in 1831 by the New York State Legislature, NYU was founded by a group of New Yorkers led by then-Secretary of the Treasury Albert Gallatin.
In 1832, the ...
, and the Philip H. Knight Professor of Management, Emeritus, and Dean, Emeritus, at the
Stanford Graduate School of Business.
Together with
George A. Akerlof
George Arthur Akerlof (born June 17, 1940) is an American economist and a university professor at the McCourt School of Public Policy at Georgetown University and Koshland Professor of Economics Emeritus at the University of California, Berkeley. ...
and
Joseph E. Stiglitz
Joseph Eugene Stiglitz (; born February 9, 1943) is an American New Keynesian economist, a public policy analyst, and a full professor at Columbia University. He is a recipient of the Nobel Memorial Prize in Economic Sciences (2001) and the ...
, Spence is a co-recipient of the 2001
Nobel Memorial Prize in Economic Sciences
The Nobel Memorial Prize in Economic Sciences, officially the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel ( sv, Sveriges riksbanks pris i ekonomisk vetenskap till Alfred Nobels minne), is an economics award administered ...
, "for their analyses of markets with asymmetric information."
Career
Spence is noted for his job-market
signaling
In signal processing, a signal is a function that conveys information about a phenomenon. Any quantity that can vary over space or time can be used as a signal to share messages between observers. The ''IEEE Transactions on Signal Processing'' ...
model, which inspired research into this branch of
contract theory
From a legal point of view, a contract is an institutional arrangement for the way in which resources flow, which defines the various relationships between the parties to a transaction or limits the rights and obligations of the parties.
From an ...
. In this model, employees signal their respective skills to employers by acquiring a certain degree of education, which is costly to them. Employers will pay higher wages to more educated employees, because they know that the proportion of employees with high abilities is higher among the educated ones, as it is less costly for them to acquire education than it is for employees with low abilities. For the model to work, it is not even necessary for education to have any intrinsic value if it can convey information about the sender (employee) to the recipient (employer) and if the signal is costly.
Spence received his middle and high school education at the
University of Toronto Schools
University of Toronto Schools (UTS) is an independent secondary day school affiliated with the University of Toronto in Toronto, Ontario, Canada. The school follows a specialized academic curriculum, and admission is determined by competitive ex ...
of the
University of Toronto
The University of Toronto (UToronto or U of T) is a public research university in Toronto, Ontario, Canada, located on the grounds that surround Queen's Park. It was founded by royal charter in 1827 as King's College, the first institution ...
. He later came back to
Rotman School of Management
The Joseph L. Rotman School of Management (commonly known as the Rotman School of Management, the Rotman School or just Rotman) is the University of Toronto's graduate business school, located in Downtown Toronto. The University of Toronto has b ...
at the
University of Toronto
The University of Toronto (UToronto or U of T) is a public research university in Toronto, Ontario, Canada, located on the grounds that surround Queen's Park. It was founded by royal charter in 1827 as King's College, the first institution ...
to serve as a member of the Rotman Dean’s Advisory Board.
Spence attended
Princeton University
Princeton University is a private university, private research university in Princeton, New Jersey. Founded in 1746 in Elizabeth, New Jersey, Elizabeth as the College of New Jersey, Princeton is the List of Colonial Colleges, fourth-oldest ins ...
as an undergraduate student and graduated summa cum laude with a B.A. in philosophy in 1966, completing a senior thesis titled "Freedom and Determinism". Spence then studied at
Magdalen College
Magdalen College (, ) is a constituent college of the University of Oxford. It was founded in 1458 by William of Waynflete. Today, it is the fourth wealthiest college, with a financial endowment of £332.1 million as of 2019 and one of the s ...
,
University of Oxford
, mottoeng = The Lord is my light
, established =
, endowment = £6.1 billion (including colleges) (2019)
, budget = £2.145 billion (2019–20)
, chancellor ...
as a
Rhodes Scholar
The Rhodes Scholarship is an international postgraduate award for students to study at the University of Oxford, in the United Kingdom.
Established in 1902, it is the oldest graduate scholarship in the world. It is considered among the world' ...
, and received a B.A./M.A. in mathematics in 1968. Spence then began graduate studies in economics at Harvard University with the support of a Danforth Graduate Fellowship in the fall of 1968. He received a Ph.D. in economics in 1972, completing a dissertation titled "Market signalling" under the supervision of
Kenneth Arrow
Kenneth Joseph Arrow (23 August 1921 – 21 February 2017) was an American economist, mathematician, writer, and political theorist. He was the joint winner of the Nobel Memorial Prize in Economic Sciences with John Hicks in 1972.
In economics ...
and
Thomas C. Schelling
Thomas Crombie Schelling (April 14, 1921 – December 13, 2016) was an American economist and professor of foreign policy, national security, nuclear strategy, and arms control at the School of Public Policy at University of Maryland, Colle ...
. Spence was awarded the David A. Wells Prize for outstanding doctoral dissertation in 1972.
He is the Chairman of the
Commission on Growth and Development, and a distinguished visiting fellow at the
Council on Foreign Relations
The Council on Foreign Relations (CFR) is an American think tank
A think tank, or policy institute, is a research institute that performs research and advocacy concerning topics such as social policy, political strategy, economics, mi ...
.
Spence joined the faculty of
New York University
New York University (NYU) is a private research university in New York City. Chartered in 1831 by the New York State Legislature, NYU was founded by a group of New Yorkers led by then-Secretary of the Treasury Albert Gallatin.
In 1832, the ...
's
Stern School of Business on September 1, 2010. He joined the faculty of
SDA Bocconi School of Management
SDA Bocconi School of Management (SDA standing for Scuola di Direzione Aziendale) is the graduate business school of Bocconi University. It is the leading School of Management in Italy and also stands among the top-ranked European institutions. ...
in Italy in July 2011.
He is a senior fellow at
Stanford University
Stanford University, officially Leland Stanford Junior University, is a private research university in Stanford, California. The campus occupies , among the largest in the United States, and enrolls over 17,000 students. Stanford is consider ...
's
Hoover Institution
The Hoover Institution (officially The Hoover Institution on War, Revolution, and Peace; abbreviated as Hoover) is an American public policy think tank and research institution that promotes personal and economic liberty, free enterprise, and ...
and the Philip H. Knight Professor Emeritus of Management in the Graduate School of Business. Spence is also a Commissioner for the Global Commission on Internet Governance. Additionally, Spence is also a member of the
Berggruen Institute
The Berggruen Institute is a Los Angeles-based think tank founded by Nicolas Berggruen.
History
In 2010, Nicolas Berggruen and Nathan Gardels sat down with a group of academics, business leaders, and political veterans in California to discus ...
's 21st Century Council.
He is the author of three books and 50 articles, and has also been a consistent contributor to ''
Project Syndicate'', an international newspaper syndicate, since 2008. Among his beliefs are that
high-frequency trading should be banned.
Spence had both
Bill Gates
William Henry Gates III (born October 28, 1955) is an American business magnate and philanthropist. He is a co-founder of Microsoft, along with his late childhood friend Paul Allen. During his career at Microsoft, Gates held the positions ...
and
Steve Ballmer
Steven Anthony Ballmer (; March 24, 1956) is an American business magnate and investor who served as the chief executive officer of Microsoft from 2000 to 2014. He is the current owner of the Los Angeles Clippers of the National Basketball Associ ...
in a graduate-level economics class at Harvard. In a 1999 ''Fortune'' interview, however, Gates and Ballmer admitted not attending class and passing only after cramming for four days before the final.
Honors and awards
Spence is an Honorary Fellow of
Magdalen College, Oxford
Magdalen College (, ) is a constituent college of the University of Oxford. It was founded in 1458 by William of Waynflete. Today, it is the fourth wealthiest college, with a financial endowment of £332.1 million as of 2019 and one of the s ...
, where he studied as a
Rhodes Scholar
The Rhodes Scholarship is an international postgraduate award for students to study at the University of Oxford, in the United Kingdom.
Established in 1902, it is the oldest graduate scholarship in the world. It is considered among the world' ...
. He was the recipient of the Nobel Memorial Prize in Economic Sciences in 2001, as well as the
John Bates Clark Medal
The John Bates Clark Medal is awarded by the American Economic Association to "that American economist under the age of forty who is adjudged to have made a significant contribution to economic thought and knowledge." The award is named after the ...
from the American Economics Association in 1981.
Spence was elected as a Fellow of the
Econometric Society
The Econometric Society is an international society of academic economists interested in applying statistical tools to their field. It is an independent organization with no connections to societies of professional mathematicians or statisticians. ...
in 1976 and a member of the
American Academy of Arts and Sciences
The American Academy of Arts and Sciences (abbreviation: AAA&S) is one of the oldest learned societies in the United States. It was founded in 1780 during the American Revolution by John Adams, John Hancock, James Bowdoin, Andrew Oliver, and ...
in 1983.
Selected works
*
*
*
Personal life
Spence currently lives in
Milan
Milan ( , , Lombard: ; it, Milano ) is a city in northern Italy, capital of Lombardy, and the second-most populous city proper in Italy after Rome. The city proper has a population of about 1.4 million, while its metropolitan city h ...
,
Italy
Italy ( it, Italia ), officially the Italian Republic, ) or the Republic of Italy, is a country in Southern Europe. It is located in the middle of the Mediterranean Sea, and its territory largely coincides with the homonymous geographical re ...
with his wife and children.
See also
*
List of economists
This is an incomplete alphabetical list by surname of notable economists, experts in the social science of economics, past and present. For a history of economics, see the article History of economic thought. Only economists with biographical artic ...
References
External links
Michael Spence Senior Fellow at
Hoover Institution
The Hoover Institution (officially The Hoover Institution on War, Revolution, and Peace; abbreviated as Hoover) is an American public policy think tank and research institution that promotes personal and economic liberty, free enterprise, and ...
,
Stanford University
Stanford University, officially Leland Stanford Junior University, is a private research university in Stanford, California. The campus occupies , among the largest in the United States, and enrolls over 17,000 students. Stanford is consider ...
* including the Prize Lecture December 8, 2001 ''Signaling in Retrospect and the Informational Structure of Markets''
*
Profilean
at
Research Papers in Economics
Research Papers in Economics (RePEc) is a collaborative effort of hundreds of volunteers in many countries to enhance the dissemination of research in economics. The heart of the project is a decentralized database of working papers, preprints, ...
/RePEc
Archive of Michael Spence articleson ''
Project Syndicate''
*
{{DEFAULTSORT:Spence, Michael
1943 births
Living people
Information economists
University of Toronto alumni
Alumni of Magdalen College, Oxford
Fellows of Magdalen College, Oxford
Harvard University alumni
Harvard University faculty
New York University Stern School of Business faculty
Princeton University alumni
Nobel laureates in Economics
Canadian Rhodes Scholars
Stanford University Graduate School of Business faculty
People from Montclair, New Jersey
Canadian economists
Canadian Nobel laureates
Hoover Institution people
American Rhodes Scholars
Fellows of the Econometric Society
Fellows of the American Academy of Arts and Sciences
Institute for New Economic Thinking
Scientists from New Jersey
20th-century Canadian scientists
21st-century Canadian scientists
20th-century American scientists
21st-century American scientists
Economists from New Jersey
21st-century American economists