They say you can’t compare the greats from yesteryear with the stars of today. But when it comes to Nobel laureates, to some extent you can.
The Nobel committee is just like a kid with a bag of candy. Every day (year) he has to decide which piece of candy to eat (to whom to give the prize) and each day some new candy might be added to his bag (new candidates come on the scene.) The twist is that each piece of candy has a random expiration date (economists randomly perish) so sometimes it is optimal to defer eating his favorite piece of candy in order to enjoy another which otherwise might go to waste.
The empirical question we are then left with is to uncover the Nobel committee’s underlying ranking of economists based on the awards actually given over time. It’s not so simple, but there are some clear inferences we can make. (Here’s a list of Laureates up to 2006, with their ages.)
To see that it is not so simple, note that just because X got the prize and Y didn’t doesn’t mean that X is better than Y. It could have been that the committee planned eventually to give the prize to Y but Y died earlier than expected (or Y is still alive and the time has not yet arrrived.)
When would the committee award the prize to X before Y despite ranking Y ahead of X? A necessary condition is that Y is older than X and is therefore going to expire sooner. (I am assuming here that age is a sufficient statistic for mortality risk.) That gives us our one clear inference:
If X received the prize before Y and X was born later than Y then X is revealed to be better than Y.
(The specific wording is to emphasize that it is calendar age that matters, not age at the time of receiving the prize. Also if Y never received the prize at all that counts too.)
Looking at the data, we can then infer some rankings.
One of the first economists to win the prize, Ragnar Frisch (who??) is not revealed preferred to anybody. By contrast, Paul Samuelson, who won the very next year is revealed preferred to kuznets, hicks, leontif, von hayk, myrdal, kantorovich, koopmans, friedman, meade, ohlin, lewis, schulz, stigler, stone, allais, haavelmo, coase and vickrey.
Outdoing Samuelson is Ken Arrow, who is revealed preferred to everyone Samuelson is plus simon, klein, tobin, debreu, buchanan, north, harsanyi, schelling and hurwicz (! hurwicz won the prize 37 years later!), but minus kuznets (a total of 25!)
Also very impressive is Robert Merton who had an incredible streak of being revealed preferred to everyone winning the prize from 1998 to 2006, ended only by Maskin and Myerson (but see below.)
On the flipside, there’s Tom Schelling who is revealed to be worse than 28 other Laureates. Leo Hurwicz is revealed to be worse than all of those plus Phelps. Hurwicz is not revealed preferred to anybody, a distinction he shares with Vickrey, Havelmo, Schultz (who??), Myrdal (?), Kuznets and Frisch.
Paul Krugman is batting 1,000 having been revealed preferred to all (two) candidates coming after him: Williamson and Ostrom.
Similar exercises could be carried out with any prize that has a “lifetime achievement” flavor (for example Sophia Loren is revealed preferred to Sidney Poitier, natch.)
There’s a real research program here which should send decision theorists racing to their whiteboards. We deduced one revealed preference implication. Question: is that all we can deduce or are there other implied relations? This is actually a family of questions that depend on how strong assumptions we want to make about the expiration dates in the candy bag. At one extreme we could ask “is any ranking consistent with the boldface rule above rationalizable by some expiration dates known to the child but not to us?” My conjecture is yes, i.e. that the boldface rule exhausts all we can infer.
At the other end, we might assume that the committee knows only the age of the candidates and assumes that everyone of a given age has the average mortality rate for that age (in the United States or Europe.) This potentially makes it harder to rationalize arbitrary choices and could lead to more inferences. This appears to be a tricky question (the infinite horizon introduces some subtleties. Surely though Ken Arrow has already solved it but is too modest to publish it.)
Of course, the committee might have figured out that we are making inferences like this and then would leverage those to send stronger signals. For example, giving the prize to Krugman at age 56 becomes a very strong signal. This would add some noise.
Finally, the kid-with-a-candy-bag analogy breaks down when we notice that the committee forms bundles. Individual rankings can still be inferred but more considerations come into play. Maskin and Myerson got the prize very young, but Hurwicz, with whom they shared the prize, was very close to expiration. We can say that the oldest in a bundle is revealed preferred to anyone older who receives a prize later. Plus we can infer rankings of fields by looking at the timing of prizes awarded to researchers in similar areas. For example, time-series econometrics (2003) is revealed preferred to the theory of organizations (2009.)
The Bottom Line: There is clear advice here for those hoping to win the prize this year, and those who actually do. If you do win the prize, for your acceptance speech you should start by doing pushups to prove how virile you are. This signals to the world that you were not given the award because of an impending expiration date but that in fact there was still plenty of time left but the committee still saw fit to act now. And if you fear you will never win the prize, the sooner you expire the more willing will the public be to believe that you would have won if only you had stuck around.