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Michael Spence

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Title: Michael Spence  
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Subject: Signalling (economics), Kenneth Arrow, John Bates Clark Medal, Unemployment in the United States, 3D printing
Collection: 1943 Births, Alumni of Magdalen College, Oxford, American Economists, American Rhodes Scholars, Canadian Economists, Canadian Nobel Laureates, Canadian Rhodes Scholars, Fellows of Magdalen College, Oxford, Guggenheim Fellows, Harvard University Alumni, Harvard University Faculty, Hoover Institution People, Information Economists, Living People, New York University Faculty, Nobel Laureates in Economics, People from Montclair, New Jersey, Princeton University Alumni, Stanford University Graduate School of Business Faculty, University of Toronto Alumni
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Michael Spence

Michael Spence
Born (1943-11-07) November 7, 1943
Montclair, New Jersey, USA
Nationality United States
Institution Harvard University
Stanford University
SDA Bocconi School of Management
New York University
Field Microeconomics, labor economics
Alma mater Harvard University, (Ph.D.)
University of Oxford, (B.A.)
Princeton University, (B.A.)
Influences Kenneth Arrow
Thomas Schelling
Richard Zeckhauser
Contributions Signaling theory
Awards John Bates Clark Medal (1981)
Nobel Memorial Prize in Economics (2001)
Information at IDEAS / RePEc

Andrew Michael Spence (born November 7, 1943, Joseph E. Stiglitz, for their work on the dynamics of information flows and market development.


  • Career 1
  • Selected works 2
  • Honors and awards 3
  • See also 4
  • References 5
  • External links 6


Spence is probably most famous for his job-market signaling model, which essentially triggered the enormous volume of literature in this branch of contract theory. 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 did his middle and high school education at the University of Toronto Schools of the University of Toronto. In 1966, he was awarded a Rhodes Scholarship at Oxford University upon graduation from Princeton University with a degree in Philosophy. He studied Mathematics at Oxford.[1] Spence is a former Dean of the Stanford Graduate School of Business and is the Chairman of the Commission on Growth and Development.

Spence joined the faculty of New York University's Stern School of Business on September 1, 2010.[2]

He is a senior fellow at Stanford University's Hoover Institution. Spence is also a Commissioner for the Global Commission on Internet Governance.[3]

He 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.[4]

Spence has been credited as Bill Gates's most influential teacher.[5]

Selected works

  • "Job Market Signaling".  
  • Market Signaling: Informational Transfer in Hiring and Related Screening Processes. Cambridge, MA:  
  • The Next Convergence: The Future of Economic Growth in a Multispeed World. New York: Farrar, Straus and Giroux. May 2011.  

Honors and awards

Spence is an Honorary Fellow of Magdalen College, Oxford, where has studied as a Rhodes Scholar.[6]

See also


  1. ^ Nobel "Autobiography"
  2. ^ "A. Michael Spence, Nobel Economist, to Join NYU Stern". NYU Stern. February 22, 2010. .
  3. ^
  4. ^ Philips, Matthew (28 March 2011). "Should High-Frequency Trading Be Banned? One Nobel Winner Thinks So". Freakanomics blog. 
  5. ^ Video on YouTube
  6. ^

External links

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