Proceedings of the National Academy of Sciences of the United States of America

About the PNAS Member Editor
Name Akerlof, George A.
Location University of California, Berkeley
Primary Field Economic Sciences
Secondary Field Social and Political Sciences
 Election Citation
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.
 Research Interests
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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