Tom Schelling and Robert Aumann have been awarded this year’s Bank of Sweden Memorial Prize. Tyler Cowen at Marginal Revolution provides some information about both of them (Schelling, Aumann). Schelling’s work is probably the better known of the two outside of economics, because in addition to being excellent it’s very readable. I use a chunk of his classic Micromotives and Macrobehavior in my undergraduate social theory class, for instance. We read a bit of The Wealth of Nations and then we read some Schelling, partly in order to get across the idea that co-ordination can be disaggregated and bottom-up process, and partly to see that markets are also a special case of a bigger class of co-ordination problems.
From an outsider’s perspective, and speculating a bit on the politics of it all, the result seems like an interestingly balanced way to mark the rise of game theory in economics. While Schelling’s work is analytically acute (and the man himself is famously sharp in discussion), it is not presented in a technical mode. You can sit down and read the essays. Aumann, on the other hand, represents a much more mathematized wing of the field, proving theorems and developing new conceptual tools with precise formal properties. So, for instance, while Schelling can write essays like “Strategic Relationships in Dying” and “The Mind as a Consuming Organ”, Aumann’s papers have titles like “The Bargaining Set for Cooperative Games” and “Subjectivity and Correlation in Randomized Strategies.” The prize committee has seemed to make these kind of balanced choices on other dimensions before, sometimes in consecutive years (Merton and Scholes followed by Sen) sometimes in the same year (Kahneman and Vern Smith).
On a side note, I’m not surprised to learn from Tyler that Schelling was his mentor. You can see it in the way he thinks about problems.