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| Name |
Akerlof, George A. |
| Location
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University of California, Berkeley |
| Primary Field
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Economic Sciences |
| Secondary Field
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Social and Political Sciences |
 Election Citation
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Akerlof has been a major figure in modern economic analysis. His demonstrations of the implications of imperfect information and other irrationalities in decision-making have had important consequences for understanding the workings of markets and their limits. He is currently probing the role of identity in economic transactions. |
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Research Interests
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My paper in 1970 entitled "The Market for 'Lemons" described the role of asymmetric information in market-destroying vicious circles. For example, in used car markets potential sellers of used cars, with superior information, withhold good cars from the market; buyers react by reducing their willingness to pay; and in turn sellers further reduce the quality of cars put up for sale. I have also worked on the application of sociology and psychology to the workings of the macroeconomy. I have used it observations from these two fields especially to explain the nature of unemployment and the business cycle, where a small amount of money illusion will make monetary policy effective. I am currently working with Rachel Kranton on the role of identity in economic transactions. Worker identification with organizations reduces the need for monetary incentives as a control device. |
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