Lots of good reactions to the Nobel for interested readers. This post from Lynne Kiesling and this from Peter Klein (Williamson’s last student) are a good place to start as is just about anything over at Organizations and Markets the last few days. My earlier thoughts are here, including some disappointment that the prize was not shared with any of my perennial UCLA trio of Alchian, Demsetz and Klein (In particular, as a Klein student I would have been thrilled to see Williamson and Klein share this prize given the committee’s recognition of the work on asset specificity and vertical integration beginning with Klein, Crawford and Alchian (1978)).
I agree with all of the commentators who have agreed that this is a really wonderful prize for all of the reasons they have mentioned: good for NIE, good for L &E, good for methodological diversity in economics, and good for folks that prefer their economics to be detailed, careful, empirically-minded and with policy relevance. And if Steve Levitt is right that most Assistant Professors in economics departments have not heard of Williamson, its also great that we’ve now presumably corrected that serious problem.
I’d like to add one other positive thing to the list that I’ve not seen discussed (but maybe I’ve missed). Another thing to really like about Williamson’s prize is that it also shows that one can be rewarded for economic insights that do not require high powered mathematics and formalization. Don’t get me wrong. There are a lot of benefits that can come from pinning down a model and deriving testable implications. But lets be real, a lot of the modeling exercises done in modern economics are not designed to have policy relevance or generate testable implications. Perhaps the Williamson prize will, among all of its other benefits, go to show that real, careful, detailed economic work — thinking like an economist and answering economic questions — can achieve great success in the field without having to also show that you can say the same thing with an elegant model.
UPDATE: Geez. I hit publish and then saw this from Peter Boettke. What he said.