Newsweek article on Vernon Smith

Newsweek article on Vernon Smith

Newsweek has an article this week on Vernon Smith. Smith won the Nobel prize last year for his work on experimental economics. The full text of the article is here: "An Experimental Mind". I learned about this at Marginal Economics.

"...Experimental economics is the brainchild of an iconoclastic academic named Vernon Smith, who had an epiphany a half century ago that has since “changed the direction of economic science.” Those were the words used by the Royal Swedish Academy of Sciences when it awarded Smith the Nobel Prize last year. With his silver ponytail and heavy Native American jewelry, Smith has shaken up establishment economists by proving that their theories are best tested not in their heads, where they are most at home, but with live experiments involving real people.

"Even before the Nobel, Smith’s ideas had spread through his preachings and those of his acolytes to transform the thinking of government, producing some of the most creative policy innovations of recent decades. Since the early 1970s experimental economists have changed the way the U.S. government sells wireless spectrum, packs a space probe, regulates the price of gas, allots airport landing slots and battles smog. They hit the headlines this summer as the inspiration behind the Pentagon’s “terror-futures market,” which was killed for being politically tone-deaf before it could prove its ability to forecast the next big Qaeda attack..."