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Briton, American win Nobel economics prize
Research helps planners when information incomplete
STOCKHOLM, Sweden (CNN) -- Briton James Mirrlees and William Vickrey, a naturalized American, were awarded the 1996 Nobel Prize for economics on October 8. They were honored for their separate work analyzing the consequences of incomplete financial information.
The citation from the Royal Swedish Academy of Sciences said research in this area tries to show how companies or governments can make decisions on such matters as contracts or taxes -- even when they lack complete information.
Just three days later after learning of the award, Vickrey died of a heart attack on October 11.
Practical applications
Mirrlees' and Vickrey's individual research has been extended to practical applications, including the loaning of money by banks or the auction of treasury bonds. For example, a bank does not know a borrower's future income, and an auctioneer does not have complete information about a potential buyer's willingness to pay. In addition, governments have to "devise an income tax system without much knowledge about the productivity of individual citizens," the citation said.
The academy said Vickrey's research concerned the properties of different types of auctions and how they can be best designed to generate economic efficiency. Mirrlees, 25 years later, capitalized on Vickrey's work in relation to income tax planning.
Cambridge, Columbia
Mirrlees was born in Minnigaff, Scotland, in 1936 and is now teaching economics at the University of Cambridge, in England.
Vickrey was born in Victoria, British Columbia, Canada, in 1914 and had been Professor Emeritus at Columbia University, New York, where he also served as a tax adviser between 1937 and 1947.
The $1.12 million prize was the third of the six Nobels announced this year.
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